TQM: DEMING

DEMING

Red Bead Seven deadly System of Profound

Funnel Experiment Fourteen Points PDCA Cycle
Experiment Diseases Knowledge

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Appreciation for a
SYSTEM OF PROFOUND system
KNOWLEDGE
Knowledge of
variation
Theory of
knowledge

Psychology
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Appreciation for a system

• Perhaps Dr. Deming’s greatest contribution and biggest departure from the past was to view an
organization as a system. He defined a system as a network of interdependent components that work
together to try to accomplish the aim of the system. The aim for any system should be that everybody
gains, not one part of the system at the expense of any other. In a business context this includes
shareholders, customers, suppliers, employees, the community and the environment. Dr. Deming used
the analogy of an orchestra to illustrate the concept of a system, “An orchestra is judged by listeners,
not so much by illustrious players, but by the way they work together. The conductor, as manager,
begets cooperation between the players, as a system, every player to support the others. There are
other aims for an orchestra, such as joy in work for the players and the conductor.”
• Taking a systems approach enables management to view its organization in terms of many internal and
external interrelated connections and interactions, as opposed to discrete and independent
departments or processes governed by various chains of command. When all the connections and
interactions are working together to accomplish a shared aim, a business can achieve tremendous
results—from improving the quality of its products and services, to raising the entire esprit de corps of a
company.
• Through illuminating demonstrations, brilliant statistical models and real-world examples in business,
Dr. Deming showed time and again how thinking in terms of a system is critically important for
discovering, analyzing and solving a wide range of problems that businesses continually face, including
processes, product design, customer satisfaction and even company morale. Indeed, in his estimation
the vast majority of the problems a business is having lies in the system. Improve the system, and the3
problems go away.
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Knowledge of variation

• “Why did something go wrong?” “Why are results so poor?” “How can we repeat this
success?” The job of management is to not only ask these and other important performance-
related questions, but also to find the right answers and take the right course of action. Dr.
Deming provided the means for management to do just that through knowledge of variation.
• In any business, there are always variations, between people, in output, in service and in
product. Drawing on his training as a statistician and the groundbreaking statistical theories of
his mentor, Walter Shewhart of Bell Laboratories, Dr. Deming located two types of variations
within a system—common cause and special cause. Common cause variations are problems
built right into the system, such as defects, errors, mistakes, waste and rework. In a stable
system, common cause variation will be predictable within certain limits. On the other hand,
special cause variations represent a unique event that is outside the system, such as a natural
disaster, or an unexpected strike by public transportation workers.
• Distinguishing the difference between variation, as well as understanding its causes and
predicting behavior, is key to management’s ability to properly remove problems or barriers in
the system. However, without knowledge of variation, management might very well (with the
very best intention) take action that actually makes things worse. Just as important, through
knowledge of variation, management realizes that attributing a problem to a person, instead
of the system, is misguided and misleading. 5
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Theory of knowledge

• Dr. Deming railed against management that blindly asserted opinion as fact, out of
convenience or ignorance. Instead, he challenged management to test its opinions,
theories, hypotheses, hunches and beliefs against data to truly understand what is
going on and learn what is necessary to improve the situation. Learning needs to
be continual and organization-wide. Theories need to be developed, applied and
tested to advance knowledge in a systematic fashion.
• To help management continually gain more and better knowledge, particularly
about its processes and products, Dr. Deming championed the Plan-Do-Study-Act
(PDSA) cycle, which was first introduced to him by Walter Shewhart. Also known as
the Deming Wheel or Deming Cycle, PDSA is a systematic and dynamic process
covering theory and application that yields valuable knowledge, not simply data or
information. It is a means for achieving a never-ending cycle of valuable learning
for the continual improvement of a process or product.

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A complaint was received by a high ranking executive of a well known major automobile
manufacturer:
“This is the second time I have written you, and I don’t blame you for not answering me,
because I kind of sounded crazy, but it is a fact that we have a tradition in our family of ice
cream for dessert after dinner each night. But the kind of ice cream varies so every night, after
we’ve eaten, the whole family votes on which kind of ice cream we should have and I drive
down to the store to get it.
It’s also a fact that I recently purchased one of your new automobiles and since then my trips to
the store have created a problem. You see, every time I buy vanilla ice cream, when I start back
from the store my car won’t start. If I get any other kind of ice cream, the car starts just fine. I
want you to know I’m serious about this question, no matter how silly it sounds: ‘What is there
about this car that makes it not start when I get vanilla ice cream, and easy to start whenever I
get any other kind?”
The president of this auto manufacturer was understandably skeptical about the letter, but sent
an engineer to check it out anyway. The latter was surprised to be greeted by a successful,
obviously well-educated man in a fine neighborhood. He had arranged to meet the man just
after dinner time, so the two hopped into the car and drove to the ice cream store. It was vanilla
ice cream that night and, sure enough, after they came back to the car, it wouldn’t start.
Now the engineer, being a logical man, refused to believe that this man’s car was allergic to
vanilla ice cream. He arranged, therefore, to continue his visits for as long as it took to solve
the problem. And toward this end he began to take notes: he jotted down all sorts of data, time
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of day, type of gas used, time to drive back and forth, etc.
• Mystery Solved
• The engineer used this new information, together
with his knowledge and experience of automobile
engines, to develop the hypothesis that the reason
or, the cause of the car not starting was a vapor
lock. The vapor lock was a constant condition in
the car, but on the nights when the man bought
other flavors the extra time required allowed the
engine to cool down sufficiently to start. When the
man got vanilla, the engine was still too hot for the
vapor lock to have dissipated and so, the car would
not start.
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THE PDSA CYCLE

The PDSA Cycle is a systematic series of steps for gaining valuable learning and knowledge for the
continual improvement of a product or process. Also known as the Deming Wheel, or Deming
Cycle, the concept and application was first introduced to Dr. Deming by his mentor, Walter
Shewhart of the famous Bell Laboratories in New York.

• The cycle begins with the Plan step. This involves

– identifying a goal or purpose,
– formulating a theory,
– defining success metrics and
– putting a plan into action.
• These activities are followed by the Do step, in which the components of the plan are
implemented.
• Next comes the Study step, where outcomes are monitored to test the validity of the plan for
signs of progress and success, or problems and areas for improvement.
• The Act step closes the cycle, integrating the learning generated by the entire process, which
can be used to adjust the goal, change methods or even reformulate a theory altogether. These
four steps are repeated over and over as part of a never-ending cycle of continual 11
improvement.
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Psychology

• The final, and in many ways the most important and difficult, element is about
people. Indeed, management can create the best system, know all about variation
and knowledge, and still not have a successful organization if they don’t understand
people, and particularly what motivates them to want to do a good job.
• Dr. Deming understood the fundamental truth that people are different.
Management must be aware of the differences and use them for optimization of
everybody’s abilities and inclinations. He also understood that people are primarily
motivated by intrinsic needs, including taking pride in workmanship and working
with others to achieve common goals, in contrast to simply being motivated by
monetary reward, which he viewed as a shortsighted external form of motivation.
• Not surprisingly, Dr. Deming rejected management-by-carrot-and-stick rewards, as
well as other common practices, such as quotas and merit ratings, which seek to affix
blame and reward to individuals. In their place, he urged management to create an
environment of trust, relationships, interdependence and pride of workmanship.

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THE FUNNEL EXPERIMENT

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THE FUNNEL EXPERIMENT

MAIN LESSONS

The learning or “rules” of the experiment can be applied to many different

types of tampering and common hasty reactions on the part of management,
all of which are obstacles to effective management and continual
improvement, including:
• Adjusting a process when a part is out of specifications
• Making changes without the aid of control charts
• Changing company policy based on the latest attitude survey
• Modifying the quota to reflect current output
• Using variances to set budgets
• Relying on history passed down from generation to generation
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THE READ BEAD EXPERIMENT

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THE RED BEAD EXPERIMENT

MAIN LESSONS

The main leanings of the red bead experiment are

• Management is responsible for improving the system workers are not
• Mere exhortations or slogans don’t improve quality, only organized
improvement does
• A carrot-stick policy or numerical quotas don’t improve worker
performance, at least definitely not in the long term
• Some workers will always be above average and some below average
• Some variation is unavoidable.

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1. Create Constancy of Purpose for the

Improvement of Product and Service

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2. Adopt the New Philosophy

Quality must become the new religion because Customers seldom complain;
they just switch ! But change is difficult.

What is the new philosophy? –

• Higher quality costs less, not more
• Management is mostly responsible, not the worker

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3. Cease Dependence on Mass Inspection

The old way: Inspect bad quality out.

The new way: Build good quality in.

Inspection is ok to find out what you are doing; but not to weed out bad
quality because:
• Too costly
• Too ineffective
• Too late

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4. End the Practice of Awarding Business on Price Tag Alone

A common practice has three major drawbacks

• Supplier proliferation leads to Increased variability

• Jumping from suppliers to suppliers leads to Reliance on Specifications
and lack of loyalty and trust
• Cost overruns

• Long term contracts lead to

– Suppliers more likely to be innovative
– Suppliers more likely to be accommodative
– Suppliers more likely to be collaborative
– Simplified accounting, paperwork etc.
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5. Improve Constantly and Forever the System of Production and Service

• Improvement is not an one-time effort. Quality must be continuous. Quality must be
built in the design stages. Once the plans are underway changes are expensive and
cause delay.
• Everyone in every department must subscribe to continuous improvement
• Management must lead the way in quality improvement
• Putting out fires is not improvement

Deming suggests considering questions like

• Is the firm doing better than a year ago?
• Whether marketing is more effective?
• Customers more satisfied?
• Pride and performance of the worker has improved?
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6. Institute Training and Retraining

Worker training worker is sure shot recipe for poor quality (Deming)
• Without proper instructions and training what is acceptable today may
not be tomorrow (the foreman may be having difficulty meeting his daily
quota)
• It is difficult erase improper training

Training should continue until there is any substantial worker improvement to

be achieved. When a stable control state is reached (using control charts)
further training will not help.

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7. Institute leadership
Leadership is the job of management. It is the responsibility of management
to discover the barriers that prevent workers from taking pride in what they
do. They are usually
• Emphasis on numbers, not quality
• Turning out the product quickly rather than properly
• A deaf ear to the workers’ suggestions
• Too much time spent on rework
• Poor tools
• Problems with incoming materials
• Poor training

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8. Drive Out Fear

Fear is all pervasive!
The economic loss from fear is terrible! (Deming)

The waste due to fear is enormous. Its one of those invisible things and
doesn’t get management’s attention

Afraid people
• Don’t point out problems
• Don’t suggest new ideas
• Don’t admit mistakes and the mistake never gets rectified
• Don’t ask questions or seek clarifications
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9. Break Down Barriers Between Staff Areas

• Purchasing departments usually place orders based on written specifications but

do not understand how the material is going to be used. So when problems
occur, they do not always know about them.
• Designers keeps coming up with designs that give engineers headaches
• Engineers often implement designs manufacturing cannot produce.

People administering policies that they had no hand in drafting and with which they
may even disagree, do so half-heartedly and without interest and uniformity often
angering customers.

JIT is not possible without breaking down barriers between staff areas. That is one of
the keys.
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10. Eliminate Slogans, Exhortations,

and Targets for the Workforce

• “Don’t skate on an oil slick” !!

• Mere Imaginative slogans like “zero defects” are meaningless.
• The implicit assumption in such sloganeering

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11. Eliminate Numerical Quotas

Numerical quotas impedes quality more than any other single working
condition. They almost certainly guarantee inefficiency and high cost.
(Deming)
What should be the nature of the numerical quota?
• Average?
• Above average?
• Linked to pay?

So what if not numerical quotas!

Same is true for management goals

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12. Remove Barriers to Pride of Workmanship

When Dr. Deming takes on a corporate client he insists on meeting the workers
without the management. Results are often surprising!

Some Problems workers face

• They never really know what is expected of them
• They never got formally trained
• Standards change frequently
• Supervisors are not helpful
• They are seldom given feedback on their work until their performance is rated
• Equipments don’t work well and their calls are answered belatedly.
Maintenance is slipshod.
• Inspection turns up defects but contains no clues how to correct them

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Institute a Vigorous Programme of

Education and Retraining
• It is not enough to have good people in your organization. They must be
continually acquiring new knowledge and new skills that are required to deal with
new materials and new methods of production. Investment in people is required
for long term planning
• As productivity improves, fewer people might be needed. Some jobs may
disappear and some may be added. The organization should make clear that with
improvement in productivity people will not be fired but only reassigned

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Take Action to Accomplish the Transformation

• Management will have to organize itself as a tem. A statistical consultant may

be needed. Every employee of the company must be involved but
management must lead the initiative.
• Management must agree on the meaning and direction to take on each of
the thirteen points
• They must have deep dissatisfaction with the way things are being are done
currently and the courage to change
• Management must build critical mass by holding seminars etc. to explain to
the people in the company why change is necessary
• Every activity is a process and can be improved. Everyone belongs on a team
• Follow the Shewhart / Deming cycle
– Plan---Do---Check---Act
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