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Wednesday, September 24, 2014

Total Quality Management Part 2 of 2

In his later years, Deming taught many concepts, which he emphasized by key sayings or quotations that he repeated, although some of the concepts appear to be contradictory to each other. A number of these quotes are listed below:
·         "There is no substitute for knowledge." This statement emphasizes the need to know more, about everything in the system. Previously, the statement, "There is no substitute for hard work" by Thomas Alva Edison (1847–1931) was the byword of industry.  Deming suggested that instead, a small amount of knowledge could save many hours of hard work.

·         "In God we trust; all others must bring data."
·         "The most important things cannot be measured." The issues that are most important, long term, cannot be measured in advance. However, they might be among the factors that an organization is measuring, just not understood as most important at the time.

·         "The most important things are unknown or unknowable." The factors that have the greatest impact, long term, can be quite surprising. Analogous to an earthquake that disrupts service, other "earth-shattering" events that most affect an organization will be unknown or unknowable, in advance. Other examples of important things would be a drastic change in technology, or new investment capital.

·         "Experience by itself teaches nothing.” This statement emphasizes the need to interpret and apply information against a framework. It is in contrast to the old statement, "Experience is the best teacher".  To Deming, knowledge is best taught by a master who explains the overall system through which experience is judged; experience, without understanding the underlying system, is just raw data that can be misinterpreted against a flawed theory of reality. 

·         "By what method?... Only the method counts." When information is obtained, or data is measured, the method, or process used to gather information, greatly affects 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 (will the table be used for chopping food or potting plants?). 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.

·         "You can expect what you inspect." Deming emphasized the importance of measuring and testing to predict typical results. If a phase consists of inputs + process + outputs, all 3 are inspected to some extent. Problems with inputs are a major source of trouble, but the process using those inputs can also have problems. By inspecting the inputs and the process more, the outputs can be better predicted, and inspected less. Rather than use mass inspection of every output product, the output can be statistically sampled in a cause-effect relationship through the process.

·         "Special Causes and Common Causes": Deming considered anomalies in quality to be variations outside the control limits of a process. Such variations could be attributed to one-time events called "special causes" or to repeated events called "common causes" that hinder quality.

·         Acceptable Defects: Rather than waste efforts on zero-defect goals, Deming stressed the importance of establishing a level of variation, or anomalies, acceptable to the recipient (or customer) in the next phase of a process. Often, some defects are quite acceptable, and efforts to remove all defects would be an excessive waste of time and money.

·         The Deming Cycle (or Shewhart Cycle): As a repetitive process to determine the next action, the Deming Cycle describes a simple method to test information before making a major decision. The 4 steps in the Deming Cycle are: Plan-Do-Check-Act (PDCA), also known as Plan-Do-Study-Act or PDSA. The cycle can be used in various ways, such as running an experiment: PLAN (design) the experiment; DO the experiment by performing the steps; CHECK the results by testing information; and ACT on the decisions based on those results. 

·         Semi-Automated, not Fully Automated: Deming lamented the problem of automation gone awry ("robots painting robots"): instead, he advocated human-assisted semi-automation, which allows people to change the semi-automated or computer-assisted processes, based on new knowledge. Compare to Japanese term 'autonomation' (which can be loosely translated as "automation with a human touch").
·         "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.)

·         "A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive, independent profit centres, and thus destroy the system. . . . The secret is cooperation between components toward the aim of the organization. We can not afford the destructive effect of competition.

·         "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.

·         "The worker is not the problem. The problem is at the top! Management!"

·          "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.”

·         "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!"
·         With the best of intentions and best efforts, managing by results is, in effect, exactly the same, as driving your automobile while keeping your eye on the rear view mirror. What would happen? That's what management by results is, keeping your eye on results.”

·         "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."

·         "Uncertainty makes research predictable, but you still need proof to satisfy everyone else."

·         "The most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them."

While Deming’s principles were developed for business, and specifically for manufacturing, I looked for nuggets that I might be able to apply to my life, believing that a philosophy that turned around a country’s economy in less than a decade is profoundly significant. Adaptations of his Total Quality Management principles and quotations that keep running through my mind are the
are the following:

·         Build quality in what I do and avoid looking for mistakes after I’m done. By inspecting the inputs and the process more, the outputs can be better predicted, and inspected less.

·         Look for ways to have pride of workmanship

·         There is no substitute for knowledge, but experience by itself teaches nothing – it must be within some context.

·         Aim and method are essential. A direction is essential before the process can be effective – Am I washing the table to perform surgery on it or to sort the mail?
·         Plan-Do-Study-Act

·         Managing by results is like driving with your eyes on the rear view mirror

Wednesday, September 17, 2014

Total Quality Management

You may never have never heard of W. Edwards Deming, but he has certainly touched your life.  Deming was born in Sioux City, IA, raised on a chicken farm in Iowa then on a 40-acre farm near Powell, WY. He graduated from the University of Wyoming in 1921 and got a PhD from Yale in 1928. 

Deming served in Japan under General McArthur, where he was told to ‘do something about the telephone service’, since in postwar Japan McArthur couldn’t complete a phone call without service interruption. Deming’s worldwide influence started after WWII when he taught a short seminar to the Japanese government on Statistical Process Control. After that exposure, he spoke to a society of Japan’s engineers on using statistical control to improve quality, reduce expenses and improve productivity and market share.
I heard of Dr. W. Edwards Deming as an undergraduate at UW where the Business Department was justifiably proud of this native son and alumni. He is a perfect example of how one individual, one common sort of person, can have a world-wide impact. 

Japanese products had the reputation of being cheap and trashy well into the 1950s. A number of Japanese manufacturers applied Deming’s techniques and experienced amazing improvements in quality and productivity. The improved quality combined with the lowered cost created new international demand for Japanese products. By the 70s and 80s, people were starting to look for Japanese products because of their reliability and longevity rather than looking out for them. 

Even though Deming had been instrumental if not THE instrument that turned the Japanese economy around, he was largely unknown and unrecognized in this country until he was featured in an NBC TV documentary titled If Japan Can…. Why Can’t We about the increasing industrial competition the United States was facing from Japan in 1980. As a result of the broadcast, demand for his services increased dramatically, and Deming consulted for worldwide industry until his death at the age of 93 in 1993. 

I keep thinking that management principles that had such a huge impact on the world economy should be adaptable to an individual. They don’t all transport down from Ford and Sony to the you or me level, but many provide food for thought at least.  

Deming offered fourteen key principles for transforming business effectiveness, the basis for Total Quality Management. Some of these seem too involved to adopt, but others hold promise. For instance, in number 3 below, I can easily strive for higher quality in the first place rather than checking for mistakes after the fact. For instance, I’ve noticed recently that when typing I’m transposing letters then have to check my typing constantly. I could just get it right the first time… 

I’ve listed Deming’s TQM key principles, basically in his words.
  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive, to stay in business and to provide jobs.
  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.
  3. Cease dependence on inspection to achieve quality. Eliminate the need for massive inspection by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of a price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
  6. Institute training on the job.
  7. Institute leadership. The aim of supervision should be to help people and machines and gadgets do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team, in order to foresee problems of production and usage that may be encountered with the product or service.
  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.
    1. Eliminate work standards (quotas) on the factory floor. Substitute with leadership.
    2. Eliminate management by objective. Eliminate management by numbers and numerical goals. Instead substitute with leadership.
  11. 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.
  12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.
In addition to the key principles, Deming suggested that there are seven deadly diseases that work against a company. These are:
  1. Lack of constancy of purpose
  2. Emphasis on short-term profits
  3. Evaluation by performance, merit rating, or annual review of performance
  4. Mobility of management
  5. Running a company on visible figures alone
  6. Excessive medical costs
  7. Excessive costs of warranty, fueled by lawyers who work for contingency fees
Deming’s “Lesser Category of Obstacles" includes:
  1. Neglecting long-range planning
  2. Relying on technology to solve problems
  3. Seeking examples to follow rather than developing solutions
  4. Excuses, such as "our problems are different"
  5. Obsolescence in school that management skill can be taught in classes
  6. Reliance on quality control departments rather than management, supervisors, managers of purchasing, and production workers
  7. Placing blame on workforces who are only responsible for 15% of mistakes where the system designed by management is responsible for 85% of the unintended consequences
  8. Relying on quality inspection rather than improving product quality