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November 9, 2011

Review of “Understanding Variation” by Donald Wheeler

Many management reports compare the current period with this time last year, or with a budget or target figure. Such single-point comparisons, however, ignore the fact of natural variation in all processes and, therefore, can tell us very little.


The answer is to present data as a time series with control limits that define the natural (expected) variation in the current process. These are called Process Behaviour Charts and are the subject of this book.


Donald Wheeler has written many texts and articles on business data, including the standard texts on statistical process control. “Understanding Variation”, however, is an easy to read and accessible guide to process behaviour charts for managers. The book is full of worked examples and is a very straightforward, yet enlightening, read.


“Understanding Variation” explores the topic more fully than Brian Joiner’s “Fourth Generation Management”. Both are recommended, but if you work with business data then I highly recommend this book. Accountants too should read this when considering the form they present management data in.