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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