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Indian Institution of Production
Engineers
PUNE SECTION
C/o S.S.Marathe A-3
“Kuladeep” 41/ 5-AB Erandavan, Pune 411 038
Phone : 020
25467192 Fax 020 25434832 e-mail :
iipepune@sify.com
Report of
Presentation in October, 2005
Birth Anniversary of Dr. W. Edwards Deming.
Every year IIPE presentation in October is dedicated
to the Philosophy of Dr. W. Edwards Deming because 14th October is
his birth anniversary. Like the last few years this year also Mr. Balaji Reddie
gave a presentation on Dr. Deming.
While introducing Mr. Reddie for the benefit of new
members, Mr. Marathe said that he is working with ASHRA Consultants. Mr. Reddie
is a thorough ‘Quality Man’ and his inspiration is Dr. Deming. He has established the Deming Forum of
Dr. W. Edwards
Deming
Mr. Balaji Reddie told at the beginning that after his
graduation at around 1994 he had no idea about Quality he came across this
aspect when he was sent to a 5 day course on TQM by Modi Xerox. He said, before
that he had also misunderstood Quality as Inspection. During this time Xerox
was going through research for their business. Initially they had 90% of the
world photocopying machine business and therefore the term ‘Xeroxing’ was
popular for photocopying. However when Japanese firm Cannon entered into this
market, they acquired 65 to 70% of the world market by 1980 and Xerox had only
20 to 25% market share. The Japanese were selling the machines at the price at
which Xerox was manufacturing them. Therefore for survival they wanted to find
out how Japanese are manufacturing the machines at such a low cost. Americans
wanted to know, ‘If
Dr. Deming gave first lecture on Quality since people
had started associating Quality with Statistical Control. However, Deming used
to say that by applying statistical control principles for the improvement of
Quality you can do only 3 %. Top management has to take it further and make it
successful. Dr. Deming always used to
say you can make a best quality zero defect product but you will still be out of the business as the
product did not have a market. Top management has to produce what customer
wants. They should realize that they are here for the sole purpose of serving
the customer.
Mr. Reddie further said that Deming was of the opinion
that shop floor people know their job but top management do not know their job.
In a meeting he asked a Vice President of Ford Motor Co., “What is your Job?”
The VP said, ‘I am ‘Vice President Manufacturing’. Dr. Deming said, “this is your title. What’s your job?” And the V.P. couldn’t answer
! Dr. Deming said that top management people do not know their job, so how do they
expect others to know their jobs. He said every body wants to do a good job.
What is stopping to fulfill this is top management. They just tell people to do
this and that without telling the reason. They should tell, why? Dr. Deming taught Japanese not the methods
but the philosophy, a manner of thinking, something that goes beyond the
methods. He said a person has to formulate his own philosophy which will
teach him to own his problems. Once you own your problems you will be driven by
your own philosophy to solve them.
Mr. Reddie then said that the real turnaround point
that came into
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Theory is given by scientist and as engineers, we
apply that theory. Therefore scientist and engineers have to work together. He
further mentioned a very common say of most of the engineers here is that ‘We are practical, we do not believe in
Theory. We go by practical experience’. However they do not know that when they use practical things they
actually use theory.
Dr. Deming observed some common elements in different organizations in JUSE and years after he came out with a philosophy what he called as ‘System of Profound Knowledge’. He often sighted it as the blend with which we view the events around us. When he started conducting seminars he used to say at the beginning of any seminar that, “I am not here to teach you anything new. I am here to make you see things that you normally would not see”. And the Profound Knowledge he said, was a theory of management, a guide with which you can understand the system of organization. He made the participants to see the things differently.
System of
Profound Knowledge:
Dr. Deming interconnected the four sciences,
what he called as
- Appreciation for a
system, a system’s theory.
- Understanding of
variation.
- Understanding of
psychology.
- Understanding the theory
of knowledge.
These are very difficult to understand. Dr. Deming has
outlined and explained this in his last book called ‘New Economy for the
Industry, Government and Education’. This book is a guide to management.
Mr. Reddie then started explaining these sciences one
by one.
1.Appreciation for a System: In Dr. Deming’s words, A system is a network of
interdependent components that works together to achieve the aim of the system.
Every system must have an aim. Without an aim there is no system. The ‘Aim’ of
a system has to create something of value. The modern business schools define
business as, ‘Purpose of business is to
create Value/ Satisfaction at a profit.’ In this definition both Value and
profit are important and the sequence is also important. It is not either Value
or Profit it is Value and Profit. It is the philosophy of ‘And’
and not of ‘Either, or’.
If we go through the notes of
Dr. Deming on Appreciation of System, he said, when we see a system from
outside we see it’s components as they are seen from outside,. We do not know
how they are interconnected from inside. Mr. Reddie gave an excellent example
of trees in Amazon forest, the roots of which are connected with each other.
Therefore even if there is rain only in one part of the forest the trees in the
other also grow green. We see trees from outside but we do not see the deeply
interconnected roots which keeps the system efficient.
Similarly in an organization we do not see
interconnected roots when we see the organization from outside. We believe that
we are managing the tree but we do not see the roots interconnected deeply
inside it.
Mr. Reddie told one very interesting thought of Dr. Deming. The analysis of a problem by ‘Fish Bone’ diagram is now known to every body. People try to find the ‘Root cause’. Dr. Deming says there is no such thing as root cause. He says it is the system of interconnected causes that affects the system. It is the system of causes in which one of those causes is predominant. However the other causes are also existing and some other time the next cause becomes predominant and so on. All causes affect each other. He says look at it as the system of interconnected causes and address them. Do not work only on the so called root cause.
. .
. . .
. 3 .
.
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2.Understanding of Variation: Mr. Reddie started discussing the second part of
Understanding of Variation. By analyzing the system if you can predict the
performance of the process or the system we can manage it by ‘Control Chart’. We need to find whether the process or
system operate within the limits or not. This is done by control chart.
Every system has fluctuations. How does it fluctuate? Why does it fluctuate?
Are there trends? This is called the understanding of fluctuations. Do we have
to react with every fluctuation or we can leave it as it is. If it fluctuates
beyond the certain limits then we need to act. Dr. Deming did not like the word
control chart. The control chart is the invention of Mr. Walter Shewhart. The
control chart is based on statistical control of Quality. The Control chart
tells us whether the process or the system is in a state of statistical
control. Concept of sigma is totally empirical and he proved it by an
experiment. While calculating ‘Sigma’ we work on total variation of the
process. But Walter Shewhart was looking for common cause variation. The common
cause variation gave the idea of range. Using range was the practical kind of
approach for understanding variation.
Mr. Reddie said that we moved
slowly from understanding of the system in to understanding of variation
because in the system there are all the components different from one another.
Dr. Deming has said that the understanding of the variation has its most
powerful application in understanding people. Dr. Deming did not believe in
saying that a particular person is below or above average. He says in a system
half of the elements will be below average and half of them will be above
average, irrespective of the performance of the system.
Dr. Deming says in a set of
people who are operating the system performance of some of the people will be
outstanding while others will be within limit. However if we reward only those
persons the performance of others will be affected. Instead if we observe those
outstanding performers, you can increase the performance of the entire system
and raise the average. This is the job of Managers. While defining the job of
the manager Dr, Deming says manager is more of a coach and counsel and not a
judge. He thought that judging the performance of person on the scale of 1 to
10 is actually similar to judging Quality by inspection which is not advisable. It should be like Quality by design, which
means you raise the performance of the process such that you get the output.
Never remove bottom 10% of the people instead bring them in to the system which
will make the system better.
Dr. Deming says every person
has different ways of learning. Some people learn by watching, some learn by
doing, some understand only written words, while some understand only spoken
words and some understand action. Therefore
the job of a manager is to understand learning process of each person.
Encourage the people to learn. From ancient days we have been told to do things
without asking question which kills the person’s natural learning process.
While explaining further about
understanding variations he said according to Dr. Deming there are two kinds of
statistical studies. They are Enumerative Study and Analytical Study .Most of us are interested in
enumerative study. We just are satisfied with nos. graphs and such data.
However we do not analytical study. We never analyse the collected data.
Therefore Dr. Deming says Control Chart
is no substitute for the brain. It merely tells us that there is a story to
be told. It is your job to find out that story about how the process is
working. You should analyse and act to improve it.
Dr. Deming was just not happy
to have the process within the limits. He told Japanese that you should not
rest at this performance of the system. Keep reducing the effect of the causes
and reduce the variations. How? Again go back to the system of causes and take
care of all of them which affect each other. Mr. Reddie said that training manuals teach us how to do? They do not
tell why? Therefore it is necessary for us to analyse and find the answer to
why. He also criticized on the
present trend of number game. At the end of the day we only ask the question
how much? Nobody is interested in why
and even how we do it?
. .
. . .
. . 4 . .
-4-
3
Understanding Theory of
Knowledge: Dr.
Deming based all his philosophy of theory of knowledge on a philosopher called
Mr. C. I. Lewis. Mr. Reddie
while explaining the meaning of quality as it was defined by Dr. Deming, said “ A Product or a Service possesses Quality which
helps someone live better (Materially and / or otherwise), and enjoys a large
and sustainable market” In this definition, ‘helps someone live better’,
look at the word better. Better today than yesterday, better tomorrow than
today and so on, there is no absolute state of quality. Dr. Deming also
mentioned the four prongs of the Quality as
· Innovation in products and Services
· Innovation of Process
· Improvement of existing products and services
· Improvement of Existing Processes
Innovating the process, means
what? Think of a completely new performance level of the system. You have to
expand the boundaries. When you have to innovate you need to expand the market.
When you want to compete the person at next door you do not pull him down you
expand the market and compete. If you don’t do it someone else will do it. He
gave a classic live example of e-mail space availability. Different companies
started giving more and more space but Google gave 1 Gb. of space. The market
expanded. Something of value is created.
Mr. Reddie asked who got benefited? The answer is, the customer. It helped someone live better. It is
relative. It is continuous or continual improvement. Dr. Deming first said, continuous and continual are not same. He asked why? (He always used to answer a question with a
question. His idea is, you find the answer. When you find
the answer you own it. You learn.) Continuous means unbroken but continual
means unending. It is never ending.
While explaining Theory of
Knowledge Dr. Deming first defined Theory. A
theory is a statement that relates cause to the effect with a risk of being
wrong. Whenever we find that the theory which we know is wrong we try to
find new things. We ask questions why? We come out with a new theory. These are
phases of problem solving or continuous improvement.
We must start with a theory. If it fails we
must ask, what would have gone wrong? What causes this to happen? Line these
questions. Experiment and find the answers. Find out if your prediction meets
your actual observation. If not, go through the same cycle again under
different conditions. If something goes right, ask why did it go right? If
theory is ineffective don’t be shy. Ask again why? That is the opportunity to
learn more. This is the basis of continual learning. The failed beliefs gave
birth to some beautiful theories.
Dr. Deming has said never copy
an example. Japanese never copied anything unless they understand the theory.
Americans initially started coping blindly, without understanding theory and
they failed. For example they copied control chart, they stared using uniforms
like Japanese. Nothing happened. All
these are just the part of all things. They never understood. They did not know
theory. Japanese experimented and laid down the theory. That is why they are
successful. One classic example of this is Toyota Production System. It is the
result of years and years of application of theories and experimentation.
Mr. Reddie said that there are
some companies which are successful in spite of not having these theories. But
they may be monopolistic or market demanding kind of position. They could
afford to have that. But further he asked, imagine how much better they would
have been if they would have adapted these concepts. On the other hand there are some companies
who have adapted these techniques and still not very successful. It may be
because they might not have understood that the four sciences are
interconnected.
. .
. . .
. 5 . .
-5-
Dr. Deming used to say, ‘Every
system must have an Aim’. Without aim there is no system. What could be that
aim. It is to ‘Create Value’ There is a very good
example of one Japanese ship building company. There was I big poster put up
there in the company. ‘We shall build
Good Ships, at a Profit if we can, at a loss if it is must’ They continued
to build good ships at profit. One fine day an American came there he removed
that placard. He was only interested in profit. The company did not last much
after that.
Mr. Reddie told the story of
how Just in Time system (JIT) was
thought of. It was then when Toyota Motor Co. were going for Deming price the
owner Mr. Toyoda used to work till late night. Once he went home very late at
about 1 to 1.30 in the night. His mother was waiting for him. She asked him,
whether he was hungry? He said, yes and
asked what she can give him to eat? She said whatever he wants. He asked for
some typical complicated rice dish. To his surprise she prepared it within 20
minutes and gave him. He was amazed. Next morning when he went back to work he
told this story to his colleagues and said this is what I want you to do it for
me in this organization. He said I want
you to give what our customer wants, the quality he wants and at the time he
wants. This is the beginning of JIT. They started this system around 1959
and perfected it in 1989. It took them 30 long years. They started making the
process mistake-proof. (Poka Yoke) They started making the changes such that
the process does not go wrong. They did this first inside their shops and then
they moved back to their suppliers. Because they felt it is not proper to shift
our inventory to our suppliers.
Mr. Reddie told one more
interesting story about Japanese companies. They buy each other’s shares so
that no body will try to pull down another and there will always be an healthy competition. They even share the knowledge. They
help each other. This is same as the example of roots of trees in Amazon Jungle
which Mr. Reddie gave at the beginning.
Mr. Reddie said that a
cigarette lighter holder manufacturing company in
According to Dr. Deming
Cooperation within the different companies is essential. Cooperation means
learning together, sharing knowledge, and sharing technology. Mr. Reddie told a
nice example of the cooperation within the companies in the present age. Sony
and Philips are joining hands together in the area of electronic devices. Sony
is powerful in making the things miniature, compactness and Philips is famous
for new technology. Therefore if they join hands they will capture the market.
Another example is of Erricson and Sony joining hands for mobile phones.
Mr. Deming suggested that if a
person arms with four sciences namely system, understanding of variations,
understanding psychology of people means understanding of people and
understanding of knowledge, he will have a complete knowledge of what is happening
around him. This it self is the system of Profound Knowledge. With that the
person will start looking the things which normally he would not see. He said
all for sciences are important because they are interconnected. He suggested
that, do not look whenever you are approaching an event anywhere at home or
your workplace you have to have this systemic view or profound view.
When
he was asked what he learnt from
During the last few years of his life Dr.
Deming was conducting seminars. In one of such seminars he was very old,
weighing only 100 lbs. He was very weak. It was a four days seminar. On the
last day in the morning session he was coughing and was given oxygen. He wanted
to still continue. When he was asked, why you are punishing yourself? He said I
am doing this because I have a responsibility to make the difference. This how
he was committed.
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While summarizing on basic philosophy of the theory of knowledge Mr. Reddie reminded about following points :
·
Test the Theory. Which theory does not work,
why it does not work? If it works why it works.
·
Do not confuse success with success, keep on
trying new things, and keep on expanding market.
·
Understand the people, Understand the learning
process of people
·
Processes very. Understand the variation in
process, people and the product
·
Think statistically. Do not react to every
thing that comes out of the study.
·
Cooperate, learn together, share
the knowledge.
NEXT MEETING
Day & date : Wednesday,
November 16, 6.30 p.m.
Venue :
Topic : Value Engineering
Speaker: Mr. H.C. Soni – Retired from High
Explosives Factory
It is a
matter of great sorrow and shock to inform that Mr. Girish G. Gokhale, an IIPE
Pune member, lost his life while on vacation during Diwali, on 3rd November.
Mr.Girish Gokhale and his brother-in-law were
playing in the sea water near the shore. During the play, Girish was pulled into the water(reason not known), and he
did could not make it back to the shore.
Girish
was just 38, and he has left back his mother, wife, and two children.
He had done very
well during his work at Cummins India Ltd.. He was a
Six Sigma Black Belt, and had recently moved from the Six Sigma Team to a new
assignment for development of Gas Engines for Automotives, as Gas Auto Leader.
Let us all pray for peace to his soul, and strength to his family to bear the
grief.
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