Leadership

Lecture 2
(Chapter 2 Part- II)
 The Deming Philosophy
• Deming’s philosophy is given in his 14 points. Most of these points
were given in a seminar for 21 Presidents of leading Japanese industry
in 1950. The rest were developed and the original ones modified over
a period of three decades.

2
1. Create and Publish the Aims and Purposes of the Organization

• Do you have clear goals for the organization communicated to all employees?
• The statement is a forever- changing document that requires input from
everyone.
• Organizations must develop a long-term view of at least ten years and plan to
stay in business by setting long-range goals.
• Resources must be allocated for research, training, and continuing education
to achieve the goals.
• Innovation is promoted to ensure that the product or service does not
become obsolete. A family organizational philosophy is developed to send the
message that everyone is part of the organization.

3
2. Learn the New Philosophy
• Top management and everyone must learn the new philosophy. Organizations
must seek never-ending improvement and refuse to accept nonconformance.
• Customer satisfaction is the number one priority, because dissatisfied
customers will not continue to purchase nonconforming products and services.
• The organization must concentrate on defect prevention rather than defect
detection.
• By improving the process, the quality and productivity will improve. Everyone
in the organization, including the union, must be involved in the quality
journey and change his or her attitude about quality. The supplier must be
helped to improve quality by requiring statistical evidence of conformance and
shared information relative to customer expectations.

4
3. Understand the Purpose of Inspection
• Management must understand that the purpose of inspection is to
improve the process and reduce its cost. For the most part, mass
inspection is costly and unreliable.
• Where appropriate, it should be replaced by never- ending
improvement using statistical techniques. Statistical evidence is
required of self and supplier.
• Every effort should be made to reduce and then eliminate acceptance
sampling. Mass inspection is managing for failure and defect
prevention is managing for success.

5
4. Stop Awarding Business Based on Price Alone
• The organization must stop awarding business based on the low bid,
because price has no meaning without quality.
• The goal is to have single suppliers for each item to develop a long-
term relationship of loyalty and trust, thereby providing improved
products and services.
• Purchasing agents must be trained in statistical process control and
require it from suppliers.
• They must follow the materials throughout the entire life cycle in
order to examine how customer expectations are affected and
provide feedback to the supplier regarding the quality.

6
5. Improve Constantly and Forever the System
• Management must take more responsibility for problems by actively
finding and correcting problems so that quality and productivity are
continually and permanently improved and costs are reduced.
• The focus is on pre- venting problems before they happen.
• Variation is expected, but there must be a continual striving for its
reduction using control charts.
• Responsibilities are assigned to teams to remove the causes of
problems and continually improve the process.

7
6. Institute Training
• Each employee must be oriented to the organization’s philosophy of
commitment to never-ending improvements. Management must
allocate resources to train employees to perform their jobs in the best
manner possible. Everyone should be trained in statistical methods,
and these methods should be used to monitor the need for further
training.

8
 7. Teach and Institute Leadership
• Improving supervision is management’s responsibility. They must
provide supervisors with training in statistical methods and these 14
points so the new philosophy can be implemented.
• Instead of focusing on a negative, fault-finding atmosphere,
supervisors should create a positive, supportive one where pride in
workmanship can flourish. All communication must be clear from top
management to supervisors to operators.

9
 8. Drive Out Fear, Create Trust, and Create a Climate for
Innovation
• Management must encourage open, effective communication and teamwork.
Fear is caused by a general feeling of being powerless to control important
aspects of one’s life.
• It is caused by a lack of job security, possible physical harm, performance
appraisals, ignorance of organization goals, poor supervision, and not knowing
the job.
• Driving fear out of the workplace involves managing for success. Management
can begin by providing workers with adequate training, good supervision, and
proper tools to do the job, as well as removing physical dangers.
• When people are treated with dignity, fear can be eliminated and people will
work for the general good of the organization. In this climate, they will provide
ideas for improvement.
10
 9. Optimize the Efforts of Teams, Groups, and Staff Areas

• Management must optimize the efforts of teams, work groups, and staff areas
to achieve the aims and purposes of the organization. Barriers exist internally
among levels of management, among departments, within departments, and
among shifts.
• Externally, they exist between the organization and its customers and suppliers.
These barriers exist because of poor communication, ignorance of the
organization’s mission, competition, fear, and personal grudges or jealousies.
• To break down the barriers, management will need a long-term perspective. All
the different areas must work together. Attitudes need to be changed;
communication channels opened; project teams organized; and training in
teamwork implemented. Multifunctional teams, such as used in concurrent
engineering, are an excellent method.
11
10. Eliminate Exhortations for the Work
Force
• Exhortations that ask for increased productivity without providing
specific improvement methods can handicap an organization.
• They do nothing but express management’s desires. They do not
produce a better product or service, because the workers are limited
by the system. Goals should be set that are achievable and are
committed to the long-term success of the organization.
Improvements in the process cannot be made unless the tools and
methods are available.

12
11. Eliminate Numerical Quotas for the Work Force
• Instead of quotas, management must learn and institute methods for
improvement. Quotas and work standards focus on quantity rather
than quality. They encourage poor workmanship in order to meet
their quotas.
• Quotas should be replaced with statistical methods of process
control. Management must provide and implement a strategy for
never-ending improvements and work with the work force to reflect
the new policies.

13
12. Remove Barriers That Rob People of Pride of Workmanship

• Loss of pride in workmanship exists throughout organizations because

(1) workers do not know how to relate to the organization’s mission,
(2) they are being blamed for system problems,
(3) poor designs lead to the production of “junk,”
(4) inadequate training is provided,
(5) punitive supervision exists, and
(6) inadequate or ineffective equipment is provided for performing the required
work.
• Restoring pride will require a long-term commitment by management.
When workers are proud of their work, they will grow to the fullest
extent of their job.
14
13. Encourage Education and Self-Improvement for Everyone

• What an organization needs is people who are improving with

education.
• A long-term commitment to continuously train and educate people
must be made by management.
• Deming’s 14 points and the organization’s mission should be the
foundation of the education program. Everyone should be retrained
as the organization requirements change to meet the changing
environment.

15
14. Take Action to Accomplish the Transformation

• Management has to accept the primary responsibility for the never-

ending improvement of the process. It has to create a corporate
structure to implement the philosophy.
• A cultural change is required from the previous “business as usual”
attitude.
• Management must be committed, involved, and accessible if the
organization is to succeed in implementing the new philosophy.

16
• Lockheed Martin Missiles and Fire Control, Grand Prairie, TX
• In the late 1990s, Lockheed Martin MFC committed to applying Dr. Deming's 14 management
points to increase productivity at its Texas operation.
• In 2012, the company received the Malcolm Baldrige National Quality Award for performance
excellence.
• According to MFC's president, Mr. James F. Berry, "It [the Baldrige Award] represents the
culmination of a 15-year journey focused on performance excellence, which has been ingrained in
all we do.”
• Lockheed Martin's commitment to excellence reflects the core of Deming's philosophy. The
company’s program resulted in annual savings of $225 million. Also, MFC reported customer
loyalty rates improved by 18 percent between 2007-2012. Employee retention rates were 95
percent in 2011 and 94 percent in 2012, and 100 percent of customers said they would definitely
or probably do business with MFC in the future. These are “best in class” numbers for large
manufacturers.

17
18
19
20
21
22
 References
• Total Quality Management - Dale H. Besterfield et al. ,Pearson
education LPE
• Certified Manager of Quality / Organizational Excellence – Russell T.
Westcott, ASQ (USA)
• Smartinvestorsreports.blogspot.com, (2012). Smart Investors:
BARRIERS TO TOTAL QUALITY MANAGEMENT IMPLEMENTATION

23