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Clifford IT Services OD Pages (continued)

Deming Profound Knowledge page









Sources of information on this page:

The W. Edwards Deming Institute

A paper on Deming by Myron Tribus

An article on Crisis in the Schools, formerly at
http://www.netaxs.com/~twin/html/deming.html
, appears to no longer be there.

William Edwards Deming, 1900-1993.

Born Oct 14, 1900 in Sioux City, Iowa.

His family moved to Wyoming in 1907.

In 1917, he enrolled in the University of Wyoming at Laramie, graduating in 1921
with a B.S. in Electrical Engineering. He earned an M.S. from the University of Colorado in 1925, and a Ph.D. From Yale University in 1928. Both graduate degrees were in mathematics and mathematical physics.
Dr. Deming married Agnes Bell in 1922 in Wyoming. Agnes and Ed had a daughter, Dorothy. Agnes died in 1930. Dr. Deming married Lola Elizabeth Shupe in 1932. They had two daughters, Diana and Linda. Dorothy died in 1984.
Dr. and Mrs. Deming lived in Washington, D. C. for the remainder of their lives in the house that they bought in 1936. With her family at her side, Mrs. Deming died on 25 June 1986. Dr. Deming, surrounded by his family, died at his home on 20 December 1993.

Dr. W. Edwards Deming, a house hold name in Japan, became the prime catalyst behind the incredible success of Japanese Industry. In fact, since 1951, the Deming Prize has been the most coveted and prestigious award among Japanese corporations, similar to the Malcolm Baldrige Award for quality in business in the United States. The lessons he has to teach American business are more urgent than ever.

Just how different is the Deming Management Method? Compare just a few of the many differences in beliefs between conventional organizations and Deming organizations:

        STANDARD COMPANY

         DEMING'S COMPANY

 

 

Quality is expensive.

Quality leads to lower costs

Inspection is the key to quality

Inspection is too late. If workers can produce defect-free goods,                                            eliminate inspections.

Quality control experts and inspectors can assure quality.

Quality is made in the boardroom.

Defects are caused by workers.

Most defects are caused by the

system.

The manufacturing process can be optimized by outside experts. No change in system afterward. No input from the workers.

Process is never optimized; it can always be improved.

Use of work standards, quotas, and

 goals can help productivity.

Elimination of all work standards.

Fear and reward are proper ways to motivate.

Fear leads to disaster.

People can be treated like commodities - buying more when needed, laying off when needing less.

People should be made to feel secure in their jobs.

Rewarding the best performers and punishing the worst will lead to greater productivity and creativity.

Most variation is caused by the

system. Review systems that judge, punish, and reward above, or below-average performance destroy teamwork and the company.

Buy at the lowest cost.

Buy from vendors committed to quality.

Play one supplier off against another.

Work with suppliers.

Switch suppliers frequently based on price only.

Invest time and knowledge to help suppliers improve quality and costs. Develop long-term relationships with suppliers.

Profits are made by keeping revenue high and costs down.

Profits are generated by loyal customers.

Profit is the most important indicator of a company.

Running a company by profit alone is like driving a car by looking It tells you where you've been, not where you are going.

Dr. Deming's fame rests on four sets of contributions over a productivelife of more than seven decades. The first began in 1928, when he received his Ph.D., and began to apply statistical methods in science. In 1934, working with Raymond T. Birge, he published a significant paper on the estimation of the errors in the physical constants.

The second phase established his reputation as a professional statistician and involved him in the census of 1940. His work generated such interest that he was invited to apply statistical methods to elections in Greece, to national surveys in India, to census activities in Germany and for the United Nations.

A third phase, which continued for the rest of his life, saw his attention directed towards the improvement of management. It began in 1944, in midst of World War II, when he published his first paper on the implications of statistical process control for managers.

The fourth area of contribution is to the field of economics. Economists have been slow to acknowledge this contribution. Japan was defeated in World War II more thoroughly than any other nation in modern times. Without natural resources, with a very large population on a small amount of tillable land, without the benefit of conquering armies, Japan has created one of the World's foremost economies. There was nothing in economic theory which would have predicted that Japan would have succeeded. The Japanese, themselves, credit their rise largely to the teachings of W. Edwards Deming, whom they call the "Father of the Third Industrial Revolution". Dr. Deming's work demonstrates that quality, pursued relentlessly, can harness the energies of a people and defy the predictions of economic theorists.

In 1947 and 1950, Dr. Deming was invited by General MacArthur to assist in the first postwar census in Japan. In 1950, acting on the advice of Homer Sarasohn, then on MacArthur's staff in Tokyo, the Japanese Union of Scientists and Engineers (JUSE) invited Dr. Deming to Tokyo to give lectures on statistical process control. His lectures to large numbers of enthusiastic Japanese engineers were transcribed, word for word, edited by him and translated into Japanese. Thousands of copies were sold. When the Japanese offered to pay him royalties, he declined, and suggested that they use the money to create a prize for companies which had shown exemplary performance in the improvement of quality. Japanese companies added funds and today the Deming Prize is regarded around the world as the premier prize for quality. When the US Congress understood the importance of the Deming Prize in Japan as a spur to increased attention to quality, they created the Baldrige Prize in the USA. Other countries are in the process of establishing similar prizes. The modest proposal he made in 1950 in Japan has become a global activity.

When W. Edwards Deming attempted to change managerial practices in the West, he found an enthusiastic response among engineers, but only rejection among managers. Therefore, after he saw the enthusiastic response of Japanese engineers, to guarantee that his work would not be subverted by Japanese management, he insisted that the JUSE arrange a meeting of the leaders of Japanese industry. Eighty of them came. In this lecture Deming told them that if they would follow his proposals to change their managerial style, within five years they would begin to capture a significant share of World markets. They did not believe him, but, in the words of one attendee, "Since we did not argue, we would lose face if we did not at least try." Within a month a manufacturer of insulated wire reported a 30% increase in productivity. Others also found increases in productivity and quality. Thus was Japan's rebirth begun.

In the West his work in management was ignored. People continued to believe that quality added to cost and that people would not pay extra for quality. Japanese car makers and electronics manufacturers proved them wrong.

Unable to convince Western managers, Dr. Deming was not idle. He continued to work as a statistician. During the period from 1946 until 1980 he published or presented 105 papers on subjects ranging over a wide variety of topics: the analysis of election results, the analysis of market surveys, the analysis of birth and death rates, the sampling of bulk materials, accidents with motor vehicles, statistical analysis as legal evidence, the birth and death of newspaper subscriptions, deaf patients of psychiatrists, fertility among schizophrenics, mental health of the deaf and the use of statistics in the setting of rates for motor freight.

All this changed on June 24, 1980, when NBC broadcast the now famous documentary entitled, If Japan Can, Why Can't We? In this documentary, Dr. Deming appeared briefly, with a few scathing remarks about American managerial practices in production. American managers, hard hit by competition from Japan, after seeing the broadcast, began to call him at his home in Washington, DC.

In 1982 MIT's Center for Advanced Engineering Study, published his first book on management, "Quality, Productivity and Competitive Position" and released videotapes in which Dr. Deming discussed his 14 Obligations of Management. In addition, he was invited by MIT, and a growing list of sponsors, to give a series of seminars on management. These seminars increased in frequency and size until during the last years of his life he attracted audiences, including satellite stations, of over 5000 people at a time and was reaching over 120,000 people per year.

In 1985 he rewrote and retitled his earlier book on management and called it Out of the Crisis. Over 250,000 copies of Out of the Crisis have been sold. It has been translated into French, Italian, Portuguese and Spanish. A translation into Dutch is in progress. In the year before his death he published a third book, The New Economics for Industry, Government, Education. Over 30,000 copies have been sold.

W. Edwards Deming was at once both kind and generous and harsh and critical. When dealing with workers he was sympathetic. He aimed to put joy back into work. He believed, and produced evidence to back up his judgment, that current managerial practices, robbed workers of the satisfactions so essential to do good work. When dealing with managers he was often scathing and derisive.

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His theory of management rests on the four elements of his "Profound Knowledge":

1) Variability:

All systems exhibit variability and this variability prevents accurate prediction of the consequences of managerial decisions. Failure to understand the role of variability leads to tampering with a system and can produce a result precisely the opposite of that intended.

2) Systems:

The second element of Deming's profound knowledge is an ability to understand systems. The practice of dividing the company into separate business "profit centers" is, as Dr. Deming would often say, incompatible with optimization of the performance of the system as a whole.

Dr. Deming insisted that managers look at the entire system of production, including in the system the suppliers and the customers. In his view, the product in the hands of the customer is still in the system.

3) Psychology:

The third element of his system of profound knowledge is an understanding of psychology. W. Edwards Deming understood that when people find joy in their work, their output rises, they make improvements in what they do, they remain loyal to their colleagues and to the enterprise. In his list of deadly diseases and his 14 points he drew attention to the practices of managers which destroy joy in work, which make workers afraid to tell the truth and which result in competition when cooperation is needed.

4) A Theory of Knowledge:

Deming believed that western managers, in general, did not know, and were not taught, a theory of knowledge and, in consequence, did not know how to reason correctly, did not understand the nature of proof, the need for operational definitions and why there is no true value of anything. This ignorance of profound knowledge, he argued, caused them to lay off people when they should have worked on increasing quality, to be unable to interpret the numbers placed before them and, worst of all, to be unable to appreciate that the most important costs in any business are unknown and unknowable.

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Deming's 14 Points

1. Create constancy of purpose for improvement of product and service.

Dr. Deming suggests a radical new definition of a company's role: A better way to make money is to stay in business and provide jobs through innovation, research, constant improvement and maintenance.

2. Adopt the new philosophy. For the new economic age, management need to take leadership for change into a 'learning organisation'. Furthermore, we need a new belief in which mistakes and negativism are unacceptable.

3. Cease dependence on mass inspection. Eliminate the need for mass inspection by building quality into the product.

4. End awarding business on price. Instead, aim at minimum total cost and move towards single suppliers.

5. Improve constantly and forever the system of production and service. Improvement is not a one-time effort. Management is obligated to continually look for ways to reduce waste and improve quality.

6. Institute training. Too often, workers have learned their job from other workers who have never been trained properly. They are forced to follow unintelligible instructions. They can't do their jobs well because no one tells them how to do so.

7. Institute leadership. The job of a supervisor is not to tell people what to do nor to punish them, but to lead. Leading consists of helping people to do a better job and to learn by objective methods.

8. Drive out fear. Many employees are afraid to ask questions or to take a position, even when they do not understand what their job is or what is right or wrong. They will continue to do things the wrong way, or not do them at all. The economic losses from fear are appalling. To assure better quality and productivity, it is necessary that people feel secure. "The only stupid question is the one that is not asked."

9. Break down barriers between departments. Often a company's departments or units are competing with each other or have goals that conflict. They do not work as a team, therefore they cannot solve or foresee problems. Even worse, one departments goal may cause trouble for another.

10. Eliminate slogans, exhortations and numerical targets for the workforce. These never help anybody do a good job. Let workers formulate their own slogans. Then they will be committed to the contents.

11. Eliminate numerical quotas or work standards. Quotas take into account only numbers, not quality or methods. They are usually a guarantee of inefficiency and high cost. A person, in order to hold a job, will try to meet a quota at any cost, including doing damage to his company.

12. Remove barriers to taking pride in workmanship. People are eager to do a good job and distressed when they cannot. Too often, misguided supervisors, faulty equipment and defective materials stand in the way of good performance. These barriers must be removed.

13. Institute a vigorous programme of education. Both management and the work force will have to be educated in the new knowledge and understanding, including teamwork and statistical techniques.

14. Take action to accomplish the transformation. It will require a special top management team with a plan of action to carry out the quality mission. Workers cannot do it on their own, nor can managers. A critical mass of people in the company must understand the 14 points.

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Deming’s "Seven Deadly Diseases"

  • Lack of constancy of purpose
  • Emphasis on short term achievements
  • Evaluation of performance, merit ratings or annual review
  • Mobility of staff, job hopping
  • Management only by known data with little consideration of the unknown
  • Excessive medical costs
  • Excessive legal costs
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Deming’s Obstacles

  • Hope for instant pudding (there are no simple solutions)
  • The belief that solving problems & using gadgets will cause the required transformation
  • Searching for examples (no theory) - copying will not work
  • Obsolescence in senior staff development
  • Poor or inappropriate use of statistics
  • Use of predefined standards for acceptance
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Deming’s 7-point Action Plan:

  1. Management struggles over the 14 Points, Deadly Diseases and obstacles and agrees meaning and plans direction.
  2. Management explains to the people in the company why change is necessary.
  3. Divide every company activity into stages, identifying the customer of each stage as the next stage. Continual improvement of methods should take place at each stage, and stages should work together towards quality.
  4. Start as soon and as quickly as possible to construct an organisation to guide continual quality improvement. Deming advocates the Deming or Shewhart Cycle as a helpful procedure for improvement of any stage.
  5. Everyone can take part in a team to improve the input and output of any stage.
  6. Embark on construction of organisation for quality. (Deming sees this as requiring the participation of knowledgeable statisticians.)
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The greatest impact of Deming's teachings are yet to come. Six years ago Mt. Edgecumbe High School in Sitka, Alaska began to apply quality management principles to the operations of the school. Within a few years the effects on the students were so dramatic that the school was besieged with requests for information. Today schools in many parts of the world are attempting the same transformation in their educational systems. In the USA, Canada, the UK, and in Argentina, schools are adopting quality methods. Teachers at the level of the second and third grades have shown how quality management approaches, applied in the classroom, can enhance learning, increase student maturity and responsibility, and at the same time, make learning more enjoyable and more relevant to life.

Ann Richards, the Governor of Texas, launched a statewide movement to make quality management the central theme in Texas education. Other Governors have followed suit.

Dr. W. Edwards Deming's contributions to science, statistics and economics were important, but his development of a comprehensive theory of management overshadows all else. This theory, has already changed the lives of millions of people. Applied to education it promises to change future generations.

Dr. Deming is gone.

His legacy lives on.

Yet, today, in 2008, we still see top management laying off workers.




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