This isn t necessarily true. The total cost of the vehicle also includes insurance premiums, gas mileage, maintenance problems etc. Determing Your PC's TCO - a brief paper on the TCO of computers. Non-value added refers to an activity performed by a company that does not enhance the value of the product produced. One of the primary responsibilities of a supply chain manager is to take out all non-value added activities.
Variability refers to the uncertainty in a supply chain.
For example, many vendors supplying product to retail stores have a great amount of variability when it comes to demand forecasts. In order to reduce this variability a retail store can send real time data from the check out register directly to the supplier. This enables the vendors to better manage their supply chain and passing on the cost savings to the customer. Basically, this is saying to increase communication among the different nodes in the supply chain. This will enable a company to better understand what is going on throughout the supply chain.