W. Edwards Deming

Thankfully, he lived beyond fourscore John 4:44 – “For Jesus himself testified that a prophet hath no honor in his own country.” (KJV)

Deming Quick Facts Born in Sioux City, Iowa Worldwide consulting practice for more than 40 years Doctorate in Mathematical Physics form Yale (1928) Awarded the Second Order Medal of the Sacred Treasure by the Emperor of Japan (1960) Author of several books and 170 papers Noted for his “4-Day Seminars” The most contemporary man listed in the ’91 U.S. News & World Report which identified 9 people or events that had changed the world.

The Deming Prize

Established in 1951 by resolution of Union of Japanese Scientists and Engineers (JUSE) board of directors. Many parallels (but some differences) to the Malcolm Baldrige Award for quality in the United States. Competition for the Deming Prize was opened to non-Japanese firms in Florida Power & Light and AT&T are the only U.S. company who have won. The Deming Prize for Individuals and the Quality Control Award for Factories are open only to Japanese candidates.

Deming on Management Deming describes present-style management as a “prison” created by the way people interact, which has caused long-range losses in government, industry, education, and healthcare … leading us into decline.

Deming on Competition We have grown up in a climate of competition … between people, teams, pupils, etc.. We have been led to believe that competition will solve our problems. COMPETITION is DESCTUCTIVE. Everyone needs to work together as a SYSTEM.

TRANSFORMATION …NOW As a result of competition (intrafirm), what we need now is a new style of management. TRANSFORMATION …HOW? The route is through Profound Knowledge

Profound Knowledge It is a System, composed of 4 parts: 1.Appreciation for a system 2.Knowledge about variation 3.Theory of knowledge 4.Psychology

a System What is it? A network of interdependent components that work together to try to accomplish the aim of the system.

a System It’s Aspects Must have an aim (i.e., a value judgment that contains plans for the future). It must be managed Co-operation is key to a successful system

Flowcharting "Draw a flowchart of what you are doing. Until you do, you do not fully understand what you are doing. You just have a job." -Dr. W. Edwards Deming

Variation Variation is inevitable Every system has variation. Just monitor the system Two Common Mistakes Relating to Variation: 1.React to an outcome as if it came from a special cause, when actually it came from common causes of variation. 2.Treat an outcome as if it came from common causes of variation, when actually it came from a special cause.

Knowledge Knowledge is built on theory (e.g., story of the rooster crowing) Use of data requires prediction No true value Information is not knowledge

Psychology

Present Practice Is to have in place a so- called merit system, i.e., annual appraisal of people. This is a form of ranking. Abolish the merit system in your company. Study the capability of the system. Study the management of people. Better Practice

Present Practice Is to rank people, salesmen, teams, divisions; reward is given to those at the top, punishment to those at the bottom. Abolish ranking. Manage the whole company as a system. The function of every component, every division, under good management, contributes toward optimization of the system. Better Practice

Present Practice Is to have incentive pay … pay based on performance. Abolish incentive pay and other payment programs based on performance. Give everyone a chance to take pride in his work. Better Practice

Present Practice There is a failure to manage the organization as a system. Instead, the components are individual profit centers. Everybody loses. Individuals, teams, divisions in the company work as individual profit centers, not for optimization of the whole organization. The various components thus actually rob themselves of long-term profit, joy in work, and other desirable measures of quality of life. Manage the company as a system. Enlarge judiciously the boundaries of the system. The system must include the future. Encourage communication. Make physical arrangements for informal dialogue between people in the various components of the company, regardless of position. Encourage continual learning and advancement. Better Practice

Present Practice Is to use M.B.O. (Management by Objectives) Study the theory of a system. Manage the components for optimization of the aim of the system. Better Practice

Present Practice Is to set numerical goals.Work on a method for improvement of a process. By what method? Better Practice

Present Practice MBR (Management By Results) Take immediate action on any fault, defect, complaint, delay, addident, breakdown. Action on the last datapoint. Understand and improve the process that produced the fault, defect, etc. Understand the distinction between common causes of variation and special causes, in order to understand the kind of action to take. Better Practice

Present Practice Buying materials and services at the lowest bid. Estimate the total cost of use of materials and services – first cost (purchase price) plus predicted cost of problems in use of them, their effect on the quality of final product. Better Practice

Present Practice Delegate quality to someone, or to a group. Accountability for quality rests with the top management. Better Practice

Criticisms of Deming Opinionated and abrasive Contradiction between his statements within the 14 points and his style of lecturing (e.g., “Drive Out Fear” vs. his public dressing down of executives). Wholeheartedly dismissed some ideas and programs, that, if properly implemented and managed, have merit.

Point #1 Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

Point #2 Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

Point #3 Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

Point #4 End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

Point #5 Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

Point #6 Institute training on the job.

Point #7 Institute leadership (see Point 12). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul as well as supervision of production workers.

Point #8 Drive out fear, so that everyone may work effectively for the company.

Point #9 Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

Point #10 Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

Point #11 Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

Point #12 Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual merit rating and of management by objective

Point #13 Institute a vigorous program of education and self-improvement.

Point #14 Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.