W. Edwards Deming

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W. Edwards Deming

• 1900 - 1993

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Thankfully, he lived beyond fourscore

• John 444 For Jesus himself testified that a
  prophet hath no honor in his own country. (KJV)

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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.

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The Deming Prize
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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 1984. Florida Power
  Light and ATT 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.

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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.

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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.

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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
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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

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a System

• What is it?

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

• Its 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

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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

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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.

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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

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Psychology
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Present Practice
Better 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.

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Present Practice
Better 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.

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Present Practice
Better 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.

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Present Practice
Better 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.

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Present Practice
Better 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.

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Present Practice
Better Practice

• Is to set numerical goals.

• Work on a method for improvement of a process.
  By what method?

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Present Practice
Better 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.

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Present Practice
Better 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.

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Present Practice
Better Practice

• Delegate quality to someone, or to a group.

• Accountability for quality rests with the top
  management.

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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.

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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.
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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.
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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.
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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.
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Point 5
Improve constantly and forever the system of
production and service, to improve quality and
productivity, and thus constantly decrease costs.
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Point 6
Institute training on the job.
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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.
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Point 8
Drive out fear, so that everyone may work
effectively for the company.
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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.
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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.
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Point 11
Eliminate work standards (quotas) on the factory
floor. Substitute leadership. Eliminate
management by objective. Eliminate management by
numbers, numerical goals. Substitute leadership.
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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
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Point 13

• Institute a vigorous program of education and
  self-improvement.

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Point 14

• Put everybody in the company to work to
  accomplish the transformation. The transformation
  is everybodys job.