The W. Edwards Deming System of Profound Knowledge

 

From The Permaculture Activist, 1996

 

"We have learned to live in a world of mistakes and defective products as if they were necessary to life. It is time to adopt a new philosophy...."

W. Edwards Deming

 

For much of his life, W. Edwards Deming was ignored or ridiculed in his native country, America, and in his chosen field, which was business management. But by the time he passed away in 1993, Deming's name was for Japanese like Ataturk is to the Turks. Deming is labeled in most Western business schools as the architect of the Japanese post-war industrial miracle and is regarded by many as the father of "total quality control" as it is practiced today. In a short quarter century, Deming moved Japan from a smoldering ruin to a world economic power. And he did it with a simple idea.

 As a statistician born in 1900, Deming's early works were studies in how to gauge production efficiencies: how to survey worker and management opinions; how to correlate those surveys to gaps in manufacturing efficiency. All very industrial paradigm. But by mid-century, Deming was making American industrialists increasingly uncomfortable.

He railed against planned obsolescence, management stratification, workplaces governed by tyranny, bootlicking and blackmail, and factories that pushed the human worker into the role of an automaton.

Deming argued that ultimate success in any endeavor is rooted in basic concepts of human behavior, such as trusting your fellow man and living by the Golden Rule. Everything starts from the importance of the human being and moves on from there, he said. Optimize human enjoyment in the act of production and you optimize production, he said. How simple. How radical.

Because he did a short tenure with Roosevelt's munitions production council, Deming was invited to Japan at the end of World War II by industrial leaders and engineers who were expecting to learn from the man who they thought had driven the American juggernaut into Asia. They hired him to rebuild the shattered Japanese manufacturing capacity, thinking they would be getting something like Detroit and Wall Street, version 2.0. They hoped Deming would help them change the common perception that all Japan produced was cheap, shoddy imitations. They wanted to build high quality and innovative consumer goods like cars and electronic appliances. They wanted to lead the world.

Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years.

Deming encouraged the Japanese to adopt a systematic approach to problem solving, which later became known as the Plan-Do-Check-Act (PDCA) cycle. Deming, however, referred to it as the Shewhart Cycle, named after his teacher, W. A. Shewhart. He subsequently replaced "Check" by "Study," as that word reflects the actual meaning more accurately.

Deming told the Japanese leaders that the consumers are the most important part of a production line. Meeting and exceeding customers' expectations is the task that everyone within an organization needs to focus on. The function of management, Deming said, was to optimize the opportunities for the workforce to improve quality, and this meant eliminating slogans and quotas and learning to work as a team, with everyone interested in the improvement of each individual, the product, and the company.

When he outlined how the industrial model had to change, few of his hosts believed him. Yet, having invited him to direct the transformation of Japanese industry, they would be embarrassed if they failed to follow his suggestions, so they went ahead, following a course that broke every business rule they knew. As Deming told it, "They surprised me and did it in four years."

For his efforts he was awarded the Second Order of the Sacred Treasure by Emperor Hirohito. Japanese scientists and engineers created the Deming Prize for excellence. In his his eightieth decade, over 100,000 business leaders attended his personal 4-day seminars. Millions more bought his books and tapes. He got another medal from President Reagan. Today his writings are required reading in every business school in the world.

DemingÕs Principles

Deming's philosophy is not complicated. By spending 20 or 30 years studying workplace efficiency, mainly through surveys of workers in giant production facilities, you would arrive at similar conclusions. But just because it is obvious how to create the conditions for success, doesn't mean it is easy. Here is Deming's formula:

Quality is everything. It is the basis for the joy of work. It is the reason anyone wants your product. It will keep you in business, which is your objective.

Where there is a lack of quality there is a failure to understand variation. Everything varies. Statistics help us to predict how much of which things are going to vary. It is a company's responsibility to know whether problems in excessive variation are in the design of its system or in the behavior of the people. Both can be improved.

The most effective way to improve quality or value is to reduce the variation in the processes whereby products are manufactured or services delivered.

Teamwork should be based on knowledge, design, redesign and redesign. Constant improvement is everyone's responsibility. Most causes of low quality and productivity are system design problems.

It is leadership's responsibility to give detailed specifications. Train people until they are in statistical control (until they are achieving as much as they can within the limits of the system you are using). Create teams that develop an esprit. Make personal self-improvement a company goal.

Deming's "new climate for organizational culture" consists of three elements:

Joy in Work,

Innovation, and

Cooperation.

Deming coined the "win-win" strategy, as opposed to the "I win: you lose" attitude engendered by competitive attitudes of the past. The best thing that can happen to a company, Deming said, is a strong competitor. Weak competition is invariably disastrous for quality improvements. Faced with strong competition, a company must move to innovate and recreate its market, not necessarily in competition with its rivals, but looking for opportunities to cooperate in providing the optimal satisfaction for customers.

Some of Deming's ideas may be more important in the next 50 years than in the 50 years just past. In coming years, survival dictates that any emerging business must necessarily have an environmental ethic. Total quality must therefore include total ecology. Waste of profits must be rooted out not only in defects, but also in waste of resources and pollution of the environment.

Future industrial systems will  embody Deming's principles of layered interconnection, resilience, and feedback, principles that we find in natural systems. A critical part of that framework is what Stafford Beer calls "autonomy of the coherent whole": business goals and feedback systems clear enough that teams and individuals have the flexibility to meet those goals without the cumbersome command and control structures of the past. Deming's philosophy is not a static cul de sac: it requires change, responsiveness, and evolution.

 

"Quality means what will sell and do a customer some goodÑat least try to. The customer is the one who supports us. We have to present to him something that he needs, in a way that he can use it. Study his needs, get ahead of him. The customer invents nothing. The customer does not contribute to design of product or the design of the service. He takes what he gets. Customer expectations? Nonsense. No customer ever asked for the electric light, the pneumatic tire, the VCR, or the CD. All customer expectations are only what you and your competitor have led him to expect. He knows nothing else."

 

-- From the last published interview with W. Edwards Deming, in the January 17, 1994 edition of Industry Week magazine

 

Whenever I see pictures and videos of Deming I am struck by how much the man resembles his contemporary, R. Buckminster Fuller. The two could have been separated at birth. Deming lived to see what Fuller never saw, which was adoption of his philosophy by large, mainstream businesses, academic and governmental accolades, and his philosophy being tought in classrooms. For a contrarian, there is no stranger reward. But I am struck by the sheer accident of history that took Deming to post-war Japan and endowed him with inordinant power to play out his theories on the gameboard of an entire nation. What if, by a similar stroke of fate, we had given Fuller, say, Germany...?

 

SIDEBAR 1

 

Deming's business philosophy is summarized in his famous "14 Points":

 

1. Constancy of purpose

 

Deming suggested that a company's principal role was to stay in business, in order to provide jobs. It accomplishes this through innovation, research, constant improvement and self-maintenance.

 

2. Adopt the new philosophy

 

What Deming proposed was a new philosophy. We are in a new economic age, created in Japan, driven by computer speed and accuracy. We can no longer live with previously accepted levels of delays, mistakes, defective materials, and defective workmanship. The pathway for change is a "learning organization" in which consistent defects, uncorrected errors and negativism are unacceptable.

 

3. Cease dependence on mass inspection.

 

Eliminate the need for mass inspection to achieve quality by building quality into the product in the first place. Instead, monitor consumer satisfaction.

 

4. End low bid contracts.

 

End the practice of awarding business solely on the basis of price. Instead require meaningful measures of quality along with price, and aim at reducing total cost by moving toward a single supplier for any one item, and by developing long term relationships of loyalty and trust.

 

5. Improve.

 

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.

 

6. Institute training.

 

New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service. Too often, workers have learned their job from other workers who were never trained, or were trained poorly. Employ good training, and retrain often.

 

7. Institute leadership.

 

The job of a supervisor is not to tell people what to do nor to punish them, but to help people to do a better job and to learn. Adopt and institute leadership aimed at helping people do their best. Improvement of quality will automatically improve productivity if immediate action is taken on reports of inherent defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.

 

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. It is necessary that people feel secure. Eliminate fear throughout the organization. "The only stupid question is the one that is not asked."  

 

9. Break down barriers.

 

Break down barriers between departments and staff areas. Units that do not work as teams cannot foresee or address common workplace or industrywide problems. Problem-solving in isolation creates problems for others. People from different areas must join in teams to solve problems from a multidisciplinary perspective.

 

10. Eliminate exhortations.

 

Slogans, posters and numerical targets never help anybody do a good job. Such exhortations only create adversarial relationships. The bulk of the causes of low quality and low productivity belong to the design of the system. Employees can create their own slogans, to which they are personally committed.

 

11. Eliminate arbitrary numerical targets.

 

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

 

12. Permit pride of workmanship.

 

Remove the barriers that rob hourly workers, and people in management, of their pride of workmanship. This implies, among other things, abolition of merit rating (appraisal of performance) and of Management by Objective. People are eager to do a good job and distressed when they cannot. Too often, misdirection, faulty equipment and defective materials stand in the way of good performance.

 

13. Encourage education.

 

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 advancing knowledge of the field of endeavor.

 

14. Commit everyone.

 

Take action to accomplish the transformation. A critical mass of people in the company must understand the 14 points. Support is not enough: constant and persistent action is required. The transformation is everybody's job.

 

SIDEBAR 2

 

''To copy an example of success, without understanding it with the aid of theory, may lead to disaster."

W. Edwards Deming, The New Economics

 

SIDEBAR 3

 

"Without theory there are no questions.  Without questions there is no learning."

W. Edwards Deming

 

SIDEBAR 4

 

 

Wrong Style

 

Management of failure (too late). It is better to work on the causes of failure. Failures are not causes; they come from causes.

Tampering with a stable system. For example, track down anything that goes wrong with a product or service. This policy does not improve the system. It is tampering, worsening the problem.

Compile a list or chart to show percentages right or percentages of product or service that went wrong last month.

Annual appraisal of performance, the so-called merit system--a destroyer of people.

Annual rating of divisions. (A manager of a division is rewarded on the basis of this rating.)

Campaign to reduce costs - as if costs were causes.

Incentive pay, commissions and bonuses.

Board of Directors failing to understand their responsibility for quality, for innovation of product and processes and for improvement of processes.

Short term planning and quick profit.

Churning money.

Competition without cooperation. Getting a bigger slice of the pie, but not making the pie bigger.

Doing business by price tag.

Short term contracts.

Management by objectives or management by the numbers.

Investment in gadgets, computers, automation and new machinery without guidance of profound knowledge.

Posters and slogans for the workforce.

Work standards - quotas. They double the cost of production, rob people of pride of workmanship and are a barrier to improvement.

 

SIDEBAR 5


Deming Resources

 

Written by W. Edwards Deming:

 

The New Economics for Industry, Education, Government (MIT Center for Advanced Engineering Study, 1993). A new softcover 2nd edition now available for $20.

 

Out of the Crisis (MIT Center for Advanced Engineering Study, 1982, rev. 1986) Deming presents his theory of management and the 14 Points for managers. $30.

 

Written by Others About DemingÕs Ideas:

 

Henry Neave, The Deming Dimension (SPC Press,1990). $20 paperback.

 

Mary Walton, The Deming Management Method (Dodd, Mead & Co., N.Y., 1986) $12.

 

Kenneth Delavigne and J. Daniel Robertson, Deming's Profound Changes (PTR Prentice Hall, Engelwood Cliffs, NJ: 1994). $24.95

 

Wm. Scherkenbach, DemingÕs Road to Continual Improvement (SPR Press, 1991) $25.

 

Wm. Scherkenbach, The Deming Route to Quality and Productivity: Road Maps and Roadblocks (Mercury Press, Rockville, MD, 1990). Originally published in 1986, this 145 page book has sold over 130,000 copies. $17.95.

 

William J. Latzko and David M Saunders, Four days with Dr. Deming (SPC Press, 1994) The essence of Dr. Deming's 4-day seminars in a remarkably entertaining and easy to absorb style. $27.95.

 

Lloyd Dobyns and Clare Crawford-Mason, Thinking About Quality: Progress, Wisdom and the Deming Philosophy (SPC Press, 1994).

 

About Deming, the Person:

 

The Best of Deming (SPC Press, 1994) collected by Ron McCoy. A collection of memorable quotes. $6.

 

Rafael Aguayo, Dr. Deming ÑThe American Who Taught the Japanese about Quality (Carol Publishing Group, N.Y., 1990). $20.

 

Andrea Gabor, The Man Who Discovered Quality (Times Books, NY: 1990). $22.

 

Cecelia S. Kilian, The World of W. Edwards Deming (SPC Press, 1992). By his secretary for nearly 40 years, this book includes notes from DemingÕs diary, his summary of his teachings in Japan. "A unique and personal picture of Dr. Deming." $20.

 

Other Resources:

 

The W. Edwards Deming Institute (WEDI)

 

The W. Edwards Deming Institute is a non-profit organization founded by W. Edwards Deming in 1993. Its aim is to focus on learning and sharing ideas and foster understanding of The Deming System of Profound Knowledge to advance commerce, prosperity, and peace.

 

For more information, please write to:

The W. Edwards Deming Institute

P O Box 59511

Potomac MD 20859-9511

Tel: (301) 299-2419

Fax: (301) 983-5132

www.deming.org

 

The Deming Cooperative

 

The Deming Cooperative provides information about programs, conferences, seminars, discussion groups, consultants, literature, videos and materials that focus on the understanding, application and extension of the work of Dr. W. Edwards Deming.

 

The Deming Electronic Network (DEN)

 

The Deming Electronic Network is a volunteer-based, non-commercial electronic communications resource. It is available to individuals and organizations all over the world interested in the past, present and future of Dr. W. Edward Deming's System of Profound Knowledge and related philosophies. The DEN has a file area with documents and programs related to Dr. W. Edward Deming's philosophies.

 

The DEN is administered with the support of, but independently from, the W. Edwards Deming Institute (WEDI) and its board of directors. The DEN is a communications infrastructure for the WEDI and its board, but does not represent or speak for them.

 

Quality Resources Online

 

Quality Resources Online, offered by Associated Quality Consultants, is a large collection of quality-related information and groups.

 

The Quality Source

 

The Quality Source is operated by the American Society for Quality Control (ASQC). ASQC is a nonprofit professional association that carries out a variety of professional, educational and informational programs on quality improvement. The Quality Source has a page that links to many other quality-related resources on the web.

 

SPC Press, Inc.

 

SPC Press, Inc. publishes and sells books on statistical process control, quality management, and related subjects. Training aids such as videotapes and specialized equipment for conducting Deming's "Experiment with the Red Beads" and "The Funnel Experiment" are also available.

 

SPC Press, Inc.

5908 Toole Dr. Suite C

Knoxville TN 37919

To Order: (800) 545-8602

Fax (423) 588-9440

 

CC-M Productions

 

CC-M Productions is a valuable resource for video and print materials related to W. Edwards Deming, Russell Ackoff and other students of management. Clare Crawford-Mason is the Producer of "The Deming Library" and "The Prophet of Quality" videos and co-author of the books "Thinking About Quality: Progress, Wisdom, and the Deming Philosophy" and "Quality Or Else: The Revolution in World Business." 

 

The Deming Videotapes

 

Thousands of people in manufacturing and service organizations are using this hard hitting, fast-paced video series. Produced by MIT, this four-tape program is based on a special recording of W. Edwards Deming's renowned four-day seminar. The tapes show Dr. Deming, America's quality legend, at his best: commanding, powerful, zealous, prophetic. Documentary footage and animated computer graphics have been added to illustrate Dr. Deming's presentation. The program is geared for all levels of employees. 

 

The Deming Videotapes parallel the content of his landmark book, Out of the Crisis, and are ideal for those wishing to see and hear Dr. Deming deliver his powerful lessons for quality improvement and transformation of management. Viewers benefit tremendously from a program guide that includes suggested discussion topics. In this way, the tapes become a very effective teaching tool that can motivate and mobilize your entire work forceÑfrom top managers and supervisors to hourly workers. The guide also contains brief summaries of all content and reading references to Out of the Crisis. The specific topics covered in each tape are listed below.

 

Tape 1 (46 minutes)

 

Introduction

   * Biographical profile of W. Edwards Deming, his life

     and work

Chain Reaction of Quality

   * Why productivity increases as quality improves

   * Production viewed as a system

   * Example: improved operational definitions

The System: Common and Special Causes of Trouble

   * Lesson of the Red Beads

   * Definitions of Common and Special Causes of

     variation

   * Example: bad thread in shoe factory (Common Cause)

   * Three examples of Common and Special Causes of

     trouble

   * Distribution of Common vs. Special Causes

   * A list of possible common causes

 

Tape 2 (47 minutes)

 

The 14 Points for Management

   * Dr. Deming's 14 Points for Management for

     improvement of quality, productivity, and

     competitive position

   * Application to manufacturing and service

     organizations

   * The role of statistical methods

   * In-depth presentation of Point 1 through 14

 

Tape 3 (61 minutes)

 

Uses of Control Charts

   * Introduction, history, and purpose of control

     charts

   * Principles for control chart development

   * Learning to use control charts

   * Example: filling orders in a mail order house

   * Advantages of a process in statistical control

New Principles of Training and Supervision

   * A new definition of supervision

   * Example: blaming workers for defects

   * The role of statistical control in employee

     training

   * The problems with ranking people on the job

Diseases and Obstacles

   * Introduction to the Diseases of Management and

     Obstacles to Success

   * Relationship to the 14 Points for Management

   * In-depth presentation of the Diseases and Obstacles

 

Tape 4 (25 minutes)

 

Quality and Productivity in Service Organizations

   * Definition of service organizations

   * Examples: problems in payroll and purchasing

     departments

   * Example: reduction of mistakes in a bank

   * Suggestions for reducing paperwork mistakes

Quality and the Consumer

   * The consumer as the judge of quality

   * The Triangle of Interaction

   * Loss of business from a dissatisfied customer

   * Consumer research

   * The Deming Cycle of Continuous Improvement

 

Available from MIT/CAES for $500 (per set) or $150 (per tape).

 

SIDEBAR 6

 

Deming's System of Profound Knowledge

 

The following is excerpted from Chapter 4 of The New Economics, second edition by W. Edwards Deming.

 

The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view--a lens--that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.

The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.

Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:

 

   * Set an example

   * Be a good listener, but will not compromise

   * Continually teach other people

   * Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past

 

The layout of profound knowledge appears here in four parts, all related to each other:

 

   * Appreciation for a system

   * Knowledge about variation

   * Theory of knowledge

   * Psychology

 

One need not be eminent in any part nor in all four parts in order to understand it and to apply it. The 14 points for management in industry, education, and government follow naturally as application of this outside knowledge, for transformation from the present style of Western management to one of optimization.

The various segments of the system of profound knowledge proposed here cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation.

A manager of people needs to understand that all people are different. This is not ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management. A psychologist that possesses even a crude understanding of variation as will be learned in the experiment with the Red Beads (Ch. 7) could no longer participate in refinement of a plan for ranking people.

Further illustrations of entwinement of psychology and use of the theory of variation (statistical theory) are boundless. For example, the number of defective items that an inspector finds depends on the size of the work load presented to him (documented by Harold F. Dodge in the Bell Telephone Laboratories around 1926). An inspector, careful not to penalize anybody unjustly, may pass an item that is just outside the borderline. The inspector in the illustration on page 265 of my book [Out of Crisis], to save the jobs of 300 people, held the proportion of defective items below 10 per cent. She was in fear for their jobs.

A teacher, not wishing to penalize anyone unjustly, will pass a pupil that is barely below the requirement for a passing grade.

Fear invites wrong figures. Bearers of bad news fare badly. To keep his job, anyone may present to his boss only good news.

A committee appointed by the President of a company will report what the President wishes to hear. Would they dare report otherwise?

An individual may inadvertently seek to cast a halo about himself. He may report to an interviewer in a study of readership that he reads the New York Times, when actually this morning he bought and read a tabloid.

Statistical calculations and predictions based on warped figures may lead to confusion, frustration, and wrong decisions.

Accounting-based measures of performance drive employees to achieve targets of sales, revenue, and costs, by manipulation of processes, and by flattery or delusive promises to cajole a customer into purchase of what he does not need(adapted from the book by H. Thomas Johnson, Relevance Regained, The Free Press, 1992).

A leader of transformation, and managers involved, need to learn the psychology of individuals, the psychology of a group, the psychology of society, and the psychology of change.

Some understanding of variation, including appreciation of a stable system, and some understanding of special causes and common causes of variation, are essential for management of a system, including management of people.

 

SIDEBAR 7

 

Mrs Prothero challenges the principles of W. Edwards Deming

by Ann Drysdale

 

"A willing worker in a random process

May now and then achieve ten out of ten

When scooping red beads, say, from among white.

But to reward him for this happy fluke

Is pointless. Next time he may score a duck-

Must we condemn him then for laxity?"

 

Ah, but see yonder Mrs Prothero

Go tentatively to the Pick 'n' Mix.

See her approach the liquorice allsorts

To scoop a quarter for her little boy.

He loves the fat, square fondants; hates the ones

That look like belly-buttons full of warts.

See now the grocer watching from the door.

See Mrs Prothero avoid his stare,

Pick up the scoop and plunge it in the sweets.

Her face a mask of studied unconcern,

She carries back her booty to the scales.

Never in more than thirty of these trips

Have any belly-buttons got that far.

Is it a special flick of a skilled wrist?

A little linger where the fondants are?

Its what they call discretionary effort

But I prefer to think of it as love.

 

From a short group of poems on 'Total Quality Management' in Turn of the Cucumber by Ann Drysdale. Published in 1995 by Peterloo Poets, Calstock

Cornwall. ISBN 1-871471-48-6.