Define process variation:

The spread of process output over time. There is variation in every process, and all variation is caused. The causes are of two types - special or common. A process can have both types of variation at the same time or only common cause variation.

source: http://www.quality.org/TQM-MSI/TQM-glossary.html

Different types of Process Variation:

CONTROLLED VARIATION
Variation that is characterized by a stable and consistent pattern of variation over time. This type of variation will be random in nature and will be exhibited by a uniform fluctuation about a constant level.

UNCONTROLLED VARIATION
Variation that is characterized by a pattern of variation that changes over time and hence is unpredictable. This type of variation will typically contain some structure.

This concept of controlled/uncontrolled variation is important in determining if a process is stable. A process is deemed stable if it runs in a consistent and predictable manner. This means that the average process value is constant and the variability is controlled. If the variation is uncontrolled, then either the process average is changing or the process variation is changing or both.

source: http://www.itl.nist.gov/div898/handbook/ppc/section1/ppc132.htm

Some of the methods to identify and deal with process variation are:

Statistical tools

Standard Deviation: One of the most important measures of variation is the standard deviation. The standard deviation (s) of a set of sample scores is a measure of variation of scores about the mean.

source: http://www.isixsigma.com/library/content/c000806c.asp

Control Charts:

Control charting is a tool used to monitor processes and to assure that they remain "In Control" or stable. Proposed by Walter Shewart in 1924, control charts help distinguish process variation due to assignable causes from those due to unassignable causes.

Types of process variation found on a control chart:

Assignable Cause, also known as Special Cause:

Meaningful factors of process;
Not always present
Cause can be avoided and should be investigated
Not normal to process

Unassignable Cause, also known as Common Cause or Chance Cause:

Factor caused by chance; always present
Unavoidable and inherent in a process
Normal and expected within process

souce: http://www.isixsigma.com/library/content/c020708a.asp

How does General Electric deal with variation and its affect on quality management initiatives?

Six Sigma, which is a methodology to manage process variations that cause defects, defined as unacceptable deviation from the mean or target; and to systematically work towards managing variation to eliminate those defects, is an integral part of GE's corporate culture. GE uses six sigma methodology to deal with process variation.

source: http://en.wikipedia.org/wiki/Six_Sigma

The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible. Six Sigma has changed the DNA of GE ? it is now the way we work

source: http://www.ge.com/sixsigma/makingcustomers.html

GE began moving towards a focus on quality in the late '80s. Work-Out®, the start of their journey, opened their culture to ideas from everyone, everywhere, decimated the bureaucracy and made boundaryless behavior a reflexive, natural part of their culture, thereby creating the learning environment that led to Six Sigma. Now, Six Sigma, in turn, is embedding quality thinking ? process thinking ? across every level and in every operation of their Company around the globe.

Work-Out® in the 1980s defined how they behave. Today, Six Sigma is defining how they work and has set the stage for making their customers feel Six Sigma.

source: http://www.ge.com/sixsigma/geevolution.html

Thus, we see that Six Sigma has radically transformed the corporate culture of GE in terms of meeting its quality related objectives.