Thread: The Deming 14 Points of Management

Posted in the Japanese miracle thread but too important to bury in there.


http://www.lii.net/deming.html


Dr. W. Edwards Deming is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States. He passed on in 1993.

Trained as a statistician, his expertise was used during World War II to assist the United States in its effort to improve the quality of war materials.

He was invited to Japan at the end of World War II by Japanese industrial leaders and engineers. They asked Dr. Deming how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products.

Dr. Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him. But they were ashamed to say so and would be embarrassed if they failed to follow his suggestions.
As Dr. Deming told it, "They surprised me and did it in four years."

He was invited back to Japan time after time where he became a revered counselor. For his efforts he was awarded the Second Order of the Sacred Treasure by the former Emperor Hirohito.

Japanese scientists and engineers named the famed Deming Prize after him. It is bestowed on organizations that apply and achieve stringent quality-performance criteria.

Deming's business philosophy is summarized in his famous "14 Points," listed below. These points have inspired significant changes among a number of leading US companies striving to compete in the world's increasingly competitive environment.

But the 14 Points pose a challenge for many firms to figure out how to apply them in a meaningful way that will result in continual improvement. Leadership Institute has developed powerful processes for coaching executive teams, and eventually their entire organizations, to begin accomplishing what Deming referred to as "the transformation."

His work is outlined in two books: Out of the Crisis and The New Economics, in which he spells out his System of Profound Knowledge.


1. Constancy of purpose

Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs.


2. The new philosophy

Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry.


3. Cease dependence on mass inspection

Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions.


4. End lowest tender contracts

End the practice of awarding business solely on the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it.


5. Improve every process

Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management's job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining).


6. Institute training on the job

Institute modern methods of training on the job for all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service.


7. Institute leadership

Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.


8. Drive out fear

Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company.


9. Break down barriers

Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.


10. Eliminate exhortations

Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; 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.


11. Eliminate arbitrary numerical targets

Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.


12. Permit pride of workmanship

Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality.


13. Encourage education

Institute a vigorous program of education, and encourage self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge.


14. Top management commitment and action

Clearly define top management's permanent commitment to ever improving quality and productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to—that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough: action is required!


Target Corporation is ranked #33 on the Fortune 500 list. They employ about 366,000 people and are the number 2 retailer in the country.


I work at a Target distribution Center and can say that none of this is practiced where I work. Instead, its MBO - or -Management By Objective. And the objective is to make money - not pursue long term commitment to quality in our process. This list is a total opposite of what we see every day and I've been telling my supervisors and the DC manager about it. No change. My coworkers all agree with everything I've said and are afraid that I might get fired for daring to criticize the management style.

One problem is that corporate policy dictates conditions in all Target DC's - all 27 of them - each with about 600 employees.

No change at corporate HQ - no change at our level.

There has been talk of getting a union in to protect us since the entire objective of management has been productivity and a lot of people have been hurt pushing themselves to try and achieve the quotas. When these people get permanently disabled, the company has treated them like they have the plague and deny compensation. Next stop is a lawyer.

On our shift we started out with 40 people. We now have 22 of the original employees and if it weren't for the rotten job market, a lot more would have left.

As the Japanese say - the problem with American business is American management.

And our government sure doesn't help any.


Steve

I was readiing the Ralph Gomery book that somebody from this board recommended
recently. Great book BTW.

In it he said that the relationship between US government, and US industry, is
widely considered by *everyone* in the economist's realms, and in the indstrial
magagement areas, to be a complete and utter nightmare.

The common consensus is that it's amazing things get done in the US at all.

Most countries have to develop retainable industries by direct involvment of the
government, which provides subsidies and leadership to encourage the long
process of developing highly technical industries where there is a huge
investement in infrastructure, education, and training. So there is always
consistent leadership where the nation's overall well-being is the prime goal.

In the US however we've almost always been at the forefront of technology
leadership and as such the leadership has always come from inside the corporations,
and the goals of corporations are often at considerable odds with the nation as a
whole.

Actually all of Deming's leadership points have become condensed in to one,
which is the single, prime rule for corporate managment:

1) Any employee can be put to work doing any other employee's job, at any
time. Nobody has special skills or talents.

Jim

I went through a huge amount of training videos in the Navy about Deming, man could he bore you to death with a monolog... Worked out well at the training command I was at once everyone was on the same page, but it fell apart soon after I left.

Jamie

"....MBO - or -Management By Objective. And the objective is to make money - not pursue long term commitment to quality in our process."

******

MBO is a good process for having people focus on short term goals and works ok if managment has a view beyond their next bonus.

I have worked for two big computer companies where the focus on short term MBO style quality goals put very expensive products in the market that failed because of poor qualtiy. They did make their manufacturing production targets. Both lost millions on warranty returns/field repairs and the customers never came back.

The Harvard Business Review had an issue that discussed a new direction in managment planning from long term to short term and some of the problems created with short term outlooks. That was around 25 years ago.

We couldn't decide at the time if the shift towards short term planning was due to faster product cycles (shorter mfg. life), or making more money now by not investing in long term capital projects (like expansion of plant/equipement).

Working then for a company that bragged about their long term commitment clouded our thinking.

This is a belief system that really does work, as long as the upper people are really on board

Originally Posted by jim rozen

Actually all of Deming's leadership points have become condensed in to one,
which is the single, prime rule for corporate managment:

1) Any employee can be put to work doing any other employee's job, at any
time. Nobody has special skills or talents.

Jim

That's quite an extensive "condensation."

Steve:

I'm somewhat suprised your employer operates in that manner. I was at a meeting with the
Dekalb County Economic Development Manager a few weeks ago. He specificly said your employer has a difficult time finding employees that can do basic math, aren't on drugs and will show up for work every day for work and retain them.

I have a story I tell to people that are upset with their employer. I had been with the company 25 years. I had this very young boss. During my performance appraisal not only did the young boss not give me a raise but said I would be the first one let go if the company experienced a slowdown. I smiled back at him and leaned forward closer to him and said, "ah, now you are thinking about letting me go. Well....don't hold back, go for it. I guess you are as discusted with me as I am with you". The boss just stood there with his head cocked and mouth open. I went on to give him my performance appraisal of him. A week later he was no longer my boss. I retired 5 years later at 56. This is the short version of a longer story.

To sum it all up. That was a heck of a thing for my boss to say to me. Furthermore, that was a heck of a thing for me to say back to my boss and employer. However, for the most part this is what work is today. A job and a paycheck.

If you want work that is creative, challenging, work hard and work smart you are rewarded, respect from others amoung other things then start your own business. This is what I did.
Today employers have nearly eliminated middle management employees and passed on their duties to subordinates with little or no compensation. Employers need to take a look at what they are doing. By attempting to save money are they also encouraging people to quit and start their own businesses? The companys I see have cut staff in an effort to save money to a point where the cuts are now costing them money. A few years before I retired I was aToolmaker, electrician, CAD designer, purchasing agent and engineer. One day I shook my head and told someone, "If I have to do all this I may as well have my own business". So I started one.

Today, I'm retired from the old job after 30 years and happily self employed for a year. Oh,,, the young boss still works for the same employer and he is now my #2 best shop customer. You figure it out???


Best regards,
Jim

Originally Posted by JimGlass

I'm somewhat suprised your employer operates in that manner. I was at a meeting with the
Dekalb County Economic Development Manager a few weeks ago. He specificly said your employer has a difficult time finding employees that can do basic math, aren't on drugs and will show up for work every day for work and retain them.

I've been there 2 years and missed 1 day due to 11 inches of snow that kept my windshield so crappy I couldn't see the road.

A co-worker during our 90 day trial started throwing up at work and asked if he could go home. They said they would write him up if he did. He stayed and peuked into the garbage can in the john 4-5 times.

Another guy hurt his back at work. He was sent home on disability. Insurance ran out. Now he's facing surgery and a metal rod in his spine to stop the pain. Target says they aren't responsible. Lawyer time.


Steve

To comment again, my statement above was NOT an attempt
to condense, or re-phrase Demming. It was my view
of what managment thinks of workers today in many
businesses.

That is how they operate their HR departments.

Jim

Originally Posted by jim rozen

To comment again, my statement above was NOT an attempt
to condense, or re-phrase Demming. It was my view
of what managment thinks of workers today in many
businesses.

That is how they operate their HR departments.

Jim

Jim R., I was pretty sure I got your drift when I made my reply, and I think you're accurate for many cases.

Jim Bakken, at a seminar for statisticians held near Detroit in June 1985, told about evidence that led Ford to Dr. Deming.

During his talk, Bakken showed a slide of what looked like three superimposed control charts pertaining to number of customer complaints per year for Ford, General Motors and Chrysler. The time span covered 1972 through 1980. The charts showed no apparent trends, but Chrysler did seem to exhibit an inordinately large number of customer complaints in the late 1970's and did perhaps have some points out of control.

Next, he overlaid on that slide, one of the same sort - involving number of customer complaints for the same years 1972 through 1980 for automobiles made by Japanese manufacturers. As in the other charts, years were indicated on the horizontal axis and number of complaints on the vertical axis; and what was clearly apparent for the Japanese cars was that the points were moving lower and lower year by year by year. There were fewer and fewer customer complaints as time progressed.

Jim Bakken said that when the management at Ford saw this, they realized that the competition from Japan came not because of that country's unique cultural heritage or the tradition of lifetime employment, their inclination for teamwork or any other of the explanations that analysts have used. Ford top management saw then in the early 1980's that what was putting the U.S. auto industry into a state of nearly terminal shock was the constant, never-ending improvement of the Japanese car manufacturers. Shortly after this revelation they looked up Dr. Deming and asked for his help....

.....As Time magazine later quoted Caldwell (Ford Chairman under then CEO, Don Petersen):

"There is no specific goal for improvement in our operations. We have a moving Target. Once we reach a new level of quality, we set our sights on a higher level. this is the philosophy we received from Dr. W. Edwards Deming, the father of Japanese quality, and we embrace it fully."

Nancy R. Mann
"The Keys To Excellence: The Story of the Deming Philosophy"
Prestwick Books, 1989
pp. 155-158


I wonder who replaced these Ford management people and what happened to "Quality is Job Number One" ?

More to come to this story.

Steve

Originally Posted by jim rozen

Actually all of Deming's leadership points have become condensed in to one,
which is the single, prime rule for corporate managment:

1) Any employee can be put to work doing any other employee's job, at any
time. Nobody has special skills or talents.

Jim

Damn right. That's why employees are referred to as "hands". That's all they were in Victorian times. My, how we've progressed!

Regards, Jim

I know this sounds like an odd rule, but consider the
opposite one: the rule that some employees have special
skills which cannot easilly be replaced, and if they
were to leave, would put the company in a bad spot.

This means that the employees have leverage over the
company, to negotiate better pay, better treatment,
better benefits. This is totally anathema to modern
corporate management and specifically not allowed.

Hence their adherence to what I call "rule one" and the
effects that derive from it. This is basically an
institutionalized "cutting off ones nose to spite ones
face."

But if you are an employee, always act as though rule one
were in effect for you. You won't be very suprised as
you go through life if you do so.

Jim

Originally Posted by jim rozen

Actually all of Deming's leadership points have become condensed in to one,
which is the single, prime rule for corporate managment:

1) Any employee can be put to work doing any other employee's job, at any
time. Nobody has special skills or talents.

Jim

While I agree that this is what American Management believes, Deming would be turning over in his grave if he knew his principles had been so distorted. Yes, the primary problem with American business is the extreme focus on the bottom line. The typical "manager" does not understand that if you take care of the employees they will take care of the organization. Any barbarian can stand in the back of the Roman war galley and make it go forward, for at least a while. Neutron Jack Welch comes to mind. It takes a farsighted individual to see beyond just this quarter's financials.

BTW, I teach QC and my first degree was in QC. My QC professor was a student of both Deming and Juran.

Dr. Stan

Dr. Stan, where do you teach and did you get a Phd ?


Steve

Originally Posted by JimGlass

Steve:

I'm somewhat suprised your employer operates in that manner. I was at a meeting with the
Dekalb County Economic Development Manager a few weeks ago. He specificly said your employer has a difficult time finding employees that can do basic math, aren't on drugs and will show up for work every day for work and retain them.

Best regards,
Jim

what they obviously didn't tell the economic development manager was that they wanted employees that can do basic math, aren't on drugs, and show up every day, AND ARE WILLING TO WORK FOR MINIMUM WAGE.....too many companies these days want PHD quality employees at illegal alien prices (my personal favorite whipping post in this regard is wallyworld, of course).....no-one with any sense of self, and the option of going somewhere else to work is willing to stay at an employer like wallyworld or target...would you? No disrespect to Steve, whom I have the utmost respect for, but he's kind of stuck, IIRC, he doesn't have many other choices in his area (feel free to correct me if I'm wrong, Steve.)

History is rife with examples (and the wallyworld philosophy of strip-mining a local economy completely and moving on is a prime one) of employers taking every advantage possible of captive employees who don't have the option of driving across town to a better job...it's the 21st-century version of the 'company store'.

It's exactly the same on the other thread re manpower.....they're whining they can't fill skilled trades positions, so obviously a shortage of skilled tradesmen exists....the reality is, there are plenty of skilled tradesmen around, they're just not willing to work for manpower prices.....

I teach at Western Kentucky University in the Agricultural and Manufacturing Sciences Department. My doctorate, an Ed.D., is from Oklahoma State University in Occupational and Adult Education.

BTW, for those interested we have on-line degree programs for both the BS and the MS in Technology Management. The BS is what we call a plus 2 program. If you already have a technical AS degree, we will simply add on the additional course work to fill out a BS degree. Most schools require that you duplicate their first two years. We do not believe that is the appropriate approach.

Go to http://www.wku.edu/Dept/Academic/Ogden/AMS/ for additional information.

"Yes, the primary problem with American business is the extreme focus on the bottom line."

******

Very true. But where in an organization does that focus come from?

I think its the Board of Directors who set the performance criteria for the top executives.

And we do have equity owners willing to dump stock at the slightest blip in value armed with same day automated price point trading which didn't exist 20 years ago.

I agree the board of directors has to bear much of the responsibility, but some also comes from the way our tax system is set up with the focus on short term, rather than long-term profits. It is a multiple issue problem, but the primary issue is greed.

It is also interesting to note companies run by people trained in sociology have the highest profit rate per employee.

Originally Posted by 77ironhead

No disrespect to Steve, whom I have the utmost respect for, but he's kind of stuck, IIRC, he doesn't have many other choices in his area (feel free to correct me if I'm wrong, Steve.)

I miss machining so much, I have to go out to my shop periodically just to remember what a lathe feels like. Target pays the bills and the distribution center has us at $17/hour and will be at $17.75 by June. The work is very physical and Target gets their sweat out of us. Unloading a semi-trailer onto a conveyor at 600 boxes an hour for 10 hours is the expectation. Blue Chep pallets in the way or heavy TVs or fridges stacked to the ceiling in 90+ degree heat - too bad, 6,000 boxes by the end of the shift. 24 warehouse workers gone since January but plenty of warm bodies waiting to replace us. Over 15,000 apps and 5,000 interviews to fill 600 jobs. The economy sucks so bad that Target can choose from college grads to drive a fork lift and they know it. Like bood in the water to a shark.

A young man I work with picked up a part time job in a shop assembling. He's a sharp guy of 28 years age and the owner is going to put him on the CNC mills to run them. Pay is $7.50/hour.

Yet the free trade madness rolls on until the bitter end.

Steve