Deming philosophy synopsis
The philosophy of W. Edwards Deming has been summarized as follows:
“Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces.”[13]
In the 1970s, Dr. Deming’s philosophy was summarized by some of his Japanese proponents with the following ‘a’-versus-’b’ comparison:
(a) When people and organizations focus primarily on quality, quality defined by the following ratio:
,
then quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on COST, then costs tend to rise and quality declines over time.
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The Deming System of Profound Knowledge™
“The prevailing style of management must undergo transformation. A system can not understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view-a lens-that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.
The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.
Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:
Set an example
Be a good listener, but will not compromise
Continually teach other people
Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past
The layout of profound knowledge appears here in four parts, all related to each other:
Appreciation for a system
Knowledge about variation
Theory of knowledge
Psychology
One need not be eminent in any part nor in all four parts in order to understand it and to apply it. The 14 points for management in industry, education, and government follow naturally as application of this outside knowledge, for transformation from the present style of Western management to one of optimization.
The various segments of the system of profound knowledge proposed here can not be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation.
A manager of people needs to understand that all people are different. This is not ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management. A psychologist that possesses even a crude understanding of variation as will be learned in the experiment with the Red Beads (Ch. 7) could no longer participate in refinement of a plan for ranking people.”[8]
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Deming’s 14 points
Deming offered fourteen key principles for management for transforming business effectiveness. In summary:
Create constancy of purpose for the improvement of product and service, with the aim to become competitive, stay in business, and provide jobs.
Adopt a new philosophy of cooperation (win-win) in which everybody wins and put it into practice by teaching it to employees, customers and suppliers.
Cease dependence on mass inspection to achieve quality. Instead, improve the process and build quality into the product in the first place.
End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
Improve constantly, and forever, the system of production, service, planning, of any activity. This will improve quality and productivity and thus constantly decrease costs.
Institute training for skills.
Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspiration. The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.
Drive out fear and build trust so that everyone can work more effectively.
Break down barriers between departments. Abolish competition and build a win-win system of cooperation within the organization. People in research, design, sales, and production must work as a team to foresee problems of production and use that might be encountered with the product or service.
Eliminate slogans, exhortations, and targets asking for zero defects or 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.
Eliminate numerical goals, numerical quotas and management by objectives. Substitute leadership.
Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.
Institute a vigorous program of education and self-improvement.
Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.
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Seven Deadly Diseases
The Seven Deadly Diseases:
Lack of constancy of purpose.
Emphasis on short-term profits.
Evaluation by performance, merit rating, or annual review of performance.
Mobility of management.
Running a company on visible figures alone.
Excessive medical costs.
Excessive costs of warranty, fueled by lawyers who work for contingency fees.
A Lesser Category of Obstacles:
Neglect of long-range planning.
Relying on technology to solve problems.
Seeking examples to follow rather than developing solutions.
Excuses such as “Our problems are different”.
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Quotations and concepts
In his later years, Dr. Deming taught many concepts, which he emphasized by key sayings, or quotations that he repeated. A number of these quotes have been recorded. [14] Some of the concepts in Deming’s quotations might seem to be an oxymoron or contradictory to one another; however, the student is encouraged to reflect about the meaning over time.
“What is a system? A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment. (We are of course talking here about a man-made system.)”[9]
“A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive. We can not afford the destructive effect of competition.”[10]
“To successfully respond to the myriad of changes that shake the world, transformation into a new style of management is required. The route to take is what I call profound knowledge – knowledge for leadership of transformation.”[11]
“The problem is at the top; management is the problem” [15], “Management’s job. It is management’s job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it. Everyone must understand the damage and loss to the whole organization from a team that seeks to become a selfish, independent, profit centre.”[12]
“They realized that the gains that you get by statistical methods are gains that you get without new machinery, without new people. Anybody can produce quality if he lowers his production rate. That is not what I am talking about. Statistical thinking and statistical methods are to Japanese production workers, foremen, and all the way through the company, a second language. In statistical control you have a reproducible product hour after hour, day after day. And see how comforting that is to management, they now know what they can produce, they know what their costs are going to be.”[13]
“I think that people here expect miracles. American management thinks that they can just copy from Japan—but they don’t know what to copy!”[14]
“What is the variation trying to tell us about a process, about the people in the process?”[15] Dr. Shewhart created the basis for the control chart and the concept of a state of statistical control by carefully designed experiments. While Dr. Shewhart drew from pure mathematical statistical theories, he understood data from physical processes never produce a “normal distribution curve” (a Gaussian distribution, also commonly referred to as a “bell curve”). He discovered that observed variation in manufacturing data did not always behave the same way as data in nature (Brownian motion of particles). Dr. Shewhart concluded that while every process displays variation, some processes display controlled variation that is natural to the process, while others display uncontrolled variation that is not present in the process causal system at all times.[16] Dr. Deming renamed these distinctions “common cause” for chance causes and “special cause” for assignable. He did this so the focus would be placed on those responsible for doing something about the variation, rather than the source of the variation. It is top management’s responsibility to address “common cause” variation, and therefore it is management’s responsibility to make improvements to the whole system. Because “special cause” variation is assignable, workers, supervisors or middle managers that have direct knowledge of the assignable cause best address this type of specific intervention.[17]
(Deming on Quality Circles) “That’s all window dressing. That’s not fundamental. That’s not getting at change and the transformation that must take place. Sure we have to solve problems. Certainly stamp out the fire. Stamp out the fire and get nowhere. Stamp out the fires puts us back to where we were in the first place. Taking action on the basis of results without theory of knowledge, without theory of variation, without knowledge about a system. Anything goes wrong, do something about it, overreacting; acting without knowledge, the effect is to make things worse. With the best of intentions and best efforts, managing by results is, in effect, exactly the same, as Dr. Myron Tribus put it, while driving your automobile, keeping your eye on the rear view mirror, what would happen? And that’s what management by results is, keeping your eye on results.”[18]
“Knowledge is theory. We should be thankful if action of management is based on theory. Knowledge has temporal spread. Information is not knowledge. The world is drowning in information but is slow in acquisition of knowledge. There is no substitute for knowledge.”[19] This statement emphasizes the need for theory of knowledge (see: epistemology, Shewhart cycle, C. I. Lewis). It is considered as a contrast to the old statement, “There is no substitute for hard work” by Thomas Alva Edison (1847-1931).
“Experience by itself teaches nothing”, “Without theory, experience has no meaning. Without theory, one has no questions to ask. Hence without theory there is no learning.”[20] These statements emphasize the need to interpret information using a theory or framework of concepts for learning to take place, theory of knowledge. It is considered as a contrast to the old statement, “Experience is the best teacher” (Dr. Deming disagreed with that). To Dr. Deming, knowledge is best taught by a master who provides sound theory through which experience is interpreted; experience, without theory, is raw data that will be not be understood. Deming’s view of experience is related to Shewhart’s concept, “Data has no meaning apart from its context” (see Walter A. Shewhart, “Later work”).
“The most important figures that one needs for management are unknown or unknowable (Lloyd S. Nelson, director of statistical methods for the Nashua corporation), but successful management must nevertheless take account of them.”[21] Deming realized that many important things, that must be managed, couldn’t be measured. Both points are important. One, you can’t measure everything of importance to management. And two, you must still manage those important things. Spend $20,000 training 10 people in a special skill. What’s the benefit? “You’ll never know,” answered Deming. “You’ll never be able to measure it. Why did you do it? Because you believed it would pay off. Theory.” Dr. Deming is often incorrectly quoted as saying: “you can’t manage what you can’t measure.” In fact, he stated one of the seven deadly diseases of management is running a company on visible figures alone.
“By what method?” [16] When information is obtained, or data is measured, the method, or process used to gather information, affects the results. Dr. Deming warned that basing judgments on customer complaints, alone, ignored the general population of other opinions, which should be judged together, such as in a statistical sample of the whole (Sampling frame). Changing the method changes the results. Aim and method are essential. An aim without a method is useless. A method without an aim is dangerous. It leads to action without direction, and without constancy of purpose. Deming used an illustration of washing a table to teach a lesson about the relationship between purpose and method. If you tell someone to wash a table, but not the reason for washing it, they cannot do the job properly. That does not mean just giving the explanation without an operational definition. The information about why the table needs to be washed, and what is to be done with it makes it possible to do the job intelligently.
