Make your own free website on Tripod.com

Chapter I

Introduction and Historical Background

 

1.1 THE EARLY 1900S: THE STORY BEGINS

William Edwards Deming was born with the century, on the 14th of October  1900. He was named after his father William Albert Deming and his mother Pluma Irene Edwards . To distinguish him from his father he was called “Edwards” . Many of his close friends referred to him as “Ed” . His family was not well off, and moved several times as his father tried to find satisfactory employment. They finished up in Wyoming, and Deming received his Bachelor's degree from the University of Wyoming in 1921, majoring in Electrical Engineering. He then went to teach Physics in Colorado, where he obtained his Master's degree. His doctorate came from Yale in 1928, in Mathematical Physics.

THE 1920s: NEW STATISTICS IN MANUFACTURING

Just like many students these days, Mr. Deming ( as of course he still was at the time ) had to “work his way through college”: he had to find holiday jobs to raise money to finance his studies. And that led to a most incredibly fortunate coincidence, without which the industrial history of the world during our lifetime might have been very different.

For, in 1925 and 1926, Mr. Deming took summer vacation jobs at the Western Electric Company in Chicago. What was so fortunate about that? Well, it was in the Western Electric Company at this very time that Dr. Walter A. Shewhart was developing his theory of what we nowadays refer to in such terms as the statistical control of processes, along with the associated tool of the control chart, and the understanding of the two fundamentally-different types of variation in processes, variation due to what Deming later called common and special causes. Deming just happened to be there, at the Western Electric Company, just at the right time.

1.2 “UNDERSTANDING VARIATION.”

Why is that important? Well, let us consider when you buy a product, or a service, or you are engaged in a service operation, or a manufacturing process, or administrative process, etc.. Does it always work smoothly, the same way, take the same amount of time – so that you can either do, or experience, a perfect job? That would be very rare. Or does it work fine one day, but have nasty surprises for you the next? That’s variation, or variability. Variation is nasty: it makes things difficult, unpredictable, untrustworthy: bad Quality. Good Quality is very much related to reliability, trustworthiness, no nasty surprises. In a big way, bad Quality means too much variation, good Quality means little variation.

And Shewhart’s breakthrough in understanding variation ( for it was nothing less ) proved to be the foundation stone of W. Edwards Deming lifetime’s work. Shewhart became not only Deming’s teacher but his mentor – somebody he found he could trust and respect, and therefore learn from with confidence. For the rest of his life ( a long while! ), Deming repeatedly attributed the source of much of his most important learning as being Walter Shewhart.

And not just for these statistical aspects of the Deming philosophy, but much else besides, including

·              Systems thinking,

·              operational definitions ( i.e. defining unambiguously how something is to be measured or assessed, and really getting to grips with if and why it should be done that way ),

·              the famous improvement cycle: Plan – Do – Study – Act (which many call the Deming Cycle but to which he always referred as the Shewhart Cycle – as proof, here it is in his own handwriting); and much more.

To quote Deming directly from his dedication in the 1980 reprint of Shewhart’s famous 1931 book: Economic Control of Quality of Manufactured Product.(1) He refers to Shewhart there as “the father of modern Quality control”, and Deming praised certain chapters of that book as being “a masterpiece on the meaning of Quality”. He continued:

“To Shewhart, Quality control meant every activity and every technique that can contribute to better living... His book emphasises the need for continual search for better knowledge about materials, how they behave in manufacture, and how the product behaves in use. Economic manufacture requires achievement of statistical control in the process and statistical control of measurements. It requires improvement of the process in every other feasible way.”

Even today, I think you will agree that most people’s interpretation of the word “Quality” is still hopelessly narrow and limited compared with Shewhart’s understanding in his great book of nearly 70 years ago.

Now, we need to know something of the circumstances in which Shewhart’s great discoveries took place, for only then can we properly understand the prime purpose of those discoveries. The sad, and costly, fact is that – despite the amount of time which has elapsed – the true purpose and hence the potential of Shewhart’s work is still greatly undervalued.

The Western Electric Company at that time was heavily involved in the development of telephone technology and related equipment. They were investing massively to increase their knowledge and ability. For some considerable time their improvement efforts had paid handsome dividends. But gradually that improvement activity began to “run out of steam”: it was achieving less and less. They were still working as hard, if not harder than before, spending much money, time, effort – every kind of resource – on trying to make things better.

Quoting a fragment of the speech (2) which Dr. Deming made at the launch of the French Deming Association in 1989. It should be no surprise that he was talking about reducing variation :

“...the harder they tried to achieve consistency and uniformity, the worse were the effects. The more they tried to shrink variation, the larger it got. They were naturally also interested in cutting costs. When any kind of error, mistake, or accident occurred, they went to work on it to try to correct it. It was a noble aim. There was only one little trouble-their worthy efforts did not work. Things got worse...”

As he explained it just a little later in the same speech:

“... they were failing to understand the difference between common causes and special causes, and that mixing them up makes things worse. ... Sure we don’t like mistakes, complaints from customers, accidents – but if we weigh in at them without understanding, then we make things worse.”

Not just fail to make them better, but make them worse.

What Dr. Deming called common-cause variation is the routine variation to be expected because of what the process is and the circumstances in which it exists and is operating. Special-cause variation is anything noticeable over and above that routine variation. ( Some people find it useful to think in terms of the analogies of common-cause variation as noise and special-cause variation as signals. ) And, surely, very different actions are called for depending on whether something is routine ( i.e. there all the time ) or exceptional ( perhaps just one-off ). That’s it. Not exactly rocket science! But still so little understood over 70 years later.

And so, Shewhart created the tool called a control chart whose purpose was to provide guidance for improvement. What kind of actions, and what kind of interpretations of data, will help you improve? But there is a lot of bad teaching around on this. To a lot of people who know what control charts are and perhaps use them, this emphasis on their use for improvement is still very new. Most people who use the control chart at all use it for monitoring purposes, as a sort of early-warning device. If all the data lie within two horizontal lines which are called the control limits ( and are computed by simple formulas from data from the process ), and continue to stay there, all is regarded as being well, and people may relax and think of other things. But if the process, says, start to wander in some way, the control chart signals the onset of trouble, so that corrective action may be taken before the trouble becomes too serious. This is how most people use control charts.

Now, it is not wrong to use the control chart in that way. Of course not. It works very well in that early-warning role. But if that is all the control chart is being used for , then you are missing out on the main purpose for which Shewhart created it, which was to provide guidance for the type of things to do which will lead to improvement, to making things better – not to just keep things as they are, which is all the monitoring use of the control chart provides – and all that it is intended to provide. To merely maintain things as they are, or to improve: that’s the difference.

And that is a major difference in purpose. Deming’s life’s work was all about providing guidance for how to improve, to make things better, and to stop doing things which cause harm and make things worse. Shewhart’s discovery of the two types of variation and his creation and intended use of the control chart were the first great steps on that long journey toward the Deming management philosophy ( or theory, or approach – whatever you wish to call it ).

1930s - 1940s: NEW STATISTICS IN NON-MANUFACTURING

So, it did all start in the 1920s with some new statistical thinking and methods in a specifically manufacturing context. Regrettably, more than 70 years later, some people still seem to think that that was all that Deming's work was about, and all that it is relevant to. Nothing could be further from the truth. For one thing, Deming was never employed in a manufacturing environment, except for his holiday jobs at Western Electric. For his first permanent employment he joined the United States Department of Agriculture ( which, I suppose, is manufacturing, but of a rather different kind ). His appointment there was as a Mathematical Physicist ( for that was the subject in which he was mainly qualified ). Twelve years latter, in 1939, he was appointed Head Mathematician and Adviser in Sampling at the National Bureau of the Census – again, hardly manufacturing! His work there, particularly with the 1940 American census, turned out to be supremely successful, and it was in that connection that he first attracted some international attention. In fact his first visit to Japan, soon after the Second World War, was primarily to work with those who would be involved with the first Japanese post-war census.

1.3 1950s - 1960s: “THE THEORY OF A SYSTEM, AND COOPERATION”

Remember that description of this era: you will see in a moment where it comes from.

A second visit to Japan, again to work with the census people, was planned for Summer 1950. By this time, Dr. Deming's name and reputation had become known to Kenichi Koyanagi, Managing Director of JUSE, the Japanese Union of Scientists and Engineers, an organisation set up soon after the war ended, having the aim to help Japanese industry get on its feet again. Koyanagi issued an all-important invitation for Dr. Deming to also teach concepts and methods for the achievement of Quality in industry. During that visit his teaching not only reached hundreds of engineers, plant managers, research workers, and so on: it also reached top management. A particularly famous meeting was held in July 1950 with the 21 top industrialists of Japan present, a meeting later described as the occasion at which Dr. Deming had in that one room 80% of the industrial capital of Japan right in front of him. Deming regarded that as the breakthrough: that those top people came to listen and learn from him.

Japan has, of course, been going through some difficulties in recent years. And there are some who point to those difficulties and say:

“There you are. I told you so. This Japan stuff, or this Quality stuff, or this Deming stuff. Doesn't work, does it?”

Well , this is as far from the truth as one can get . Dr. Deming , just as he predicted the rise of Japan after the War , also predicted their downfall . This was in the year 1985 when Dr. Deming was at the peak of his popularity in the United States of America . A delegation of top American industrialists accompanied him to attend the 35th anniversary of the Deming Award presentation . The Japanese were waiting for Dr. Deming to begin his speech as they expected a shower of praises in front of the American delegation . But to their horror , they found him castigating a lot of their practices what he termed as “Deadly Diseases” of management – his exact words were –

“It is important that Japanese management remain strong , not weakened and diluted by adoption of some of the practices that are largely responsible for the decline of Western industry . It is possible for a strong body to become infected , to become weak . Japanese management has responsibilities to continue to be strong and not to pick up infections from Western management” .

He continued....

”Is Japanese management to be infected with the diseases of western management ? Rating people ? Japanese management has an obligation to Japan and to the rest of the world to remain strong”.....It is important that the Deming Prize committee beware of the poison that can come from unstudied practices from the Western world”....

He also said in a private conversation with one of his friends that he did notice some of the wrong practices being introduced in Japan and in fact commented that if they continued in the same vein , the Japanese would collapse in 15 years . This was in 1988 – as we can see the Japanese beat his prediction yet again !!

So yes, Japan's industrialists, including those at the top, listened and learned some good sense from Dr. Deming. And it wasn't just his reputation, and the fact that he was an eminent scholar ( which has always earned rather more respect in Japan than in some Western countries ). Another reason they did so was well – expressed by Koyanagi (3) as follows:

“Most of the Japanese were in a servile spirit as the vanquished, and among Allied personnel there were not a few with an air of importance [ which was something of an understatement ]. In striking contrast, Dr. Deming showed his warm cordiality to every Japanese whom he met. ... His high personality deeply impressed all those who learned from him and became acquainted with him. ... The sincerity and enthusiasm with which he did his best for us still lives and will live forever in memory of all concerned.”

Deming treated the Japanese with warmth and respect and humanity. In a short piece of film from post-war Japan shown in “Doctor's Orders,” Dr. Deming provided the following “voice-over”, showing genuine sympathy and understanding :

“Japanese top management, and anybody in Japan, could understand that Japan was in a crisis. They could not continue to receive food from the American army forever. They needed new equipment, having no resources. Industry was on the ground. Twisted steel where there had been a factory: was now a rice-field. They were in a crisis. They knew that.”

So what did he teach them, to help them out of that crisis? Was it just statistics ( as some claim )? Well , this is an entry in his diary, dated 10 July 1950 : 

“The lectures are being held at the Japan Medical Association in Ochanomizu. ... Over 600 men had applied, and the limit was finally overstrained to 230. Professor Masuyama and assistants will teach the statistical control of Quality in the afternoon. I shall teach during the forenoon the theory of a system, and cooperation..”

There you are: that is where the title of this section comes from : his own diary. Deming was content, on this occasion and others, to leave the teaching of statistics to assistants, while he concentrated on the really important matters.

What did he mean by “the theory of a system, and cooperation”? Here is an abbreviated version of his own seven-point summary of his teaching in Japan during that summer.

[ This first point was the famous flow diagram, his simple but profound picture of an organisation viewed as a system. He regarded this as the most important diagram he ever drew in his life. ]

It is often called the “Page 4” diagram, because that is where it appears in his 1986 book: Out of the Crisis. (5) Out of the Crisis is a big, fat book! The fact that this appears so early indicates how fundamental he considered it to be: right up front.

It is also well worth quoting from his final book: The New Economics for Industry, Government, Education. A section (6) titled with the question: “What ignited Japan?” reads as follows :

The flow diagram was the spark that in 1950 and onward turned Japan around. It displayed to top management and to engineers a system of production. The Japanese had knowledge, great knowledge, but it was in bits and pieces, uncoordinated. This flow diagram directed their knowledge and efforts into a system of production, geared to the market – namely, prediction of needs of customers. The whole world knows about the results. This simple flow diagram was on the blackboard at every conference with top management in 1950 and onward. It was on the blackboard in the teaching of engineers. Action began to take place when top management and engineers saw how to use their knowledge.

What is so special about the flow diagram? Two main things . Firstly, it is an all-important horizontal view of how the work needs to get done – what actually happens, and what needs to happen – In an organisation, rather than the familiar vertical view, which is just the power structure, the conventional organisation chart :

And it is a very neat perspective that this vertical structure is so often obstructive to the horizontal flow. But it is that which is all-important regarding what the organisation actually does. And secondly, whereas the doing is represented by the arrows going from left to right in the flow diagram, the organisation should be continually improving – because of the learning and feedback represented by the arrows along the top going from right to left. And the vertical structure can be pretty effective at getting in the way of that as well!

So that is the big one. But now, the other six of the seven points.

2.      Quality is determined by the management. Outgoing Quality cannot be better than the intentions of the management. [so often one heard him say, simply, “Quality is made in the Boardroom”.]

3.      The consumer is most important. What will help him in the future? Strive for long-term relationships with your customers. [What will help the consumer in the future – not just now? ...Strive for long-term relationships.] The consumer was at the right side of the Page 4 diagram. At the left is the supplier – who should be your partner, working together, long-term, in trust and cooperation. Why? Not “just to be nice”. Supplier and customer will both be better off – that's why:]

4.      Your supplier is your partner. Make him your partner. Work together on continual improvement of Quality. Develop a long-term relationship with a supplier in a spirit of mutual trust and cooperation. Supplier and customer will both win.

5.      There is a second famous diagram dating from 1950: the chain reaction. “Improve Quality” (in the big sense in which Deming meant it) leads to “improve productivity” leads to “expand”. Note “jobs and more jobs”: he loathed unemployment – he saw it as such a waste of humanity and human potential:

 [Finally,]

6.      Need for trust and cooperation between companies.

[and]

7.      Development of trust and respect.

The are some common themes running through that list! And it's hardly just statistics. And it's hardly just for manufacturing companies!

( The uncut version of Dr. Deming's summary of his teachings in Japan can be found in Chapter 3 of The World of W. Edward's Deming. (7)

It is not surprising that there should have been such a development of emphasis in Deming's teachings. When you get into it, an inevitable consequence of Shewhart's understanding of those two types of variation is that the great majority of problems ( or, thinking positively, of opportunities for improvement ) lie in the common causes – the system, as Deming called it. When something goes wrong, the fault rarely lies in individuals. Looking round for a scapegoat, someone to blame, is the last thing that management should do. The fault wholly or primarily lies in the system: the environment, the circumstances, the working conditions, the values, the “company culture” within which individuals live, work, try to succeed, try to survive – yet so often it is that very culture which repeatedly and consistently obstructs their aims and desires.

So Deming's thinking, as a natural consequence of Shewhart's thinking, leads to a vast change of emphasis from what is still commonplace in so much of modern management – and indeed, even more sadly, of modern government. It is still commonplace, often increasingly so ( and you know it ), to be focused on blame or praise, punishment or reward, or judgment of the individual.. Deming had already, half a century ago, come to realise that that focus is misplaced.

To repeat, he had concluded that the vast majority of performance, behaviour, results – whatever – comes from the system within which people live and work rather than from the individuals themselves. And, if that is true, then of course what can be achieved by such focus on judgment of the individual is trivial compared with what can be achieved by focusing instead on improvement of the system within which the individual works and lives. This, in large part, explains why Deming was so critical of managing and judging – with reward and punishment involved – related to the achievement ( or otherwise ) of numerical targets and quotas and objectives and numerical goals. And of performance-related pay and ranking and rating and league-tabling. It's a long list: you could add more.

Now, there is no time to get into those contentious issues here, and in fact it would be irrelevant to try. Why? Because it would be putting the cart before the horse ( which is either unproductive or dangerous, depending on whether you are on the level or on a slope ).

It is time to move on. But to where?

THE 1970s: ?

A question mark. Because there is relatively little knowledge of what was happening with Deming during this decade.

He was still working very hard, lecturing regularly at the New York universities, still publishing research papers, visiting Japan for the annual Deming Prize ceremonies. And that is in spite of the fact that effectively the Japanese had stopped learning anything significant from him years earlier. And there was no sign that the rest of the world, including his home country of America, had any interest in what he could do for them either. Even in his secretary's biography of him, a section listing his “International Activities” has many entries in the 1950s, fewer in the 1960s, and then only two for the 1970s: that he lectured in Argentina in 1971 and, interestingly, that he was a consultant to the China Productivity Centre in Taiwan in 1970 and 1971. And then :  nothing.

It is believed ( and this would hardly be surprising in the circumstances ) that during this time he suffered some depression. Two particular evidences support that belief. First, when a group of about 30 people from the British Deming Association were having a Study Weekend with him in 1988, they got him talking about his life. And he said a lot about the 1950s and, to an extent, the 1960s. But when asked about what happened in the 1970s, after a long pause he just muttered: “Oh, nothing much.” He just didn't want to talk any more. The other evidence was when some of the music he had composed in the mid-1970s was being performed by one of his friends in 1995 which can only be described as deeply and distressingly unhappy. He obviously felt that the great learning with which he could help the Western world, if only we would listen, would die with him. He had reached that kind of age.

Thankfully, as we know, that was not the case.

1.4 THE 1980s (FIRST HALF) : THE WEST AWAKENS

Though Japanese contacts, an American Chief Executive did at last discover Deming in 1979, and began to listen and learn. This was William E. Conway of the Nashua Corporation. Deming's involvement with Nashua began in just sufficient time to become known to the NBC television producer, Clare Crawford-Mason, who at that time had begun to prepare a documentary which was first screened in June 1980, a programme with the title: If Japan Can, Why Can't We?. That was the breakthrough. As Deming's secretary later wrote : (8)

“American industrialists who watched the programme not only grasped more fully the enormity of the problems that they were facing, but they also realised that answers were available. Perhaps more importantly, W. Edwards Deming was introduced to the audience as the man with effective answers. It was an introduction that would change his life irrevocably”

( and, she might have added, the lives of countless others ).

Here is a transcript of several short extracts from “If Japan Can, Why Can't We?”

Lloyd Dobyns (narrator):

We have said several times that much of what the Japanese are doing we taught them to do. And the man who did most of the teaching is W. Edwards Deming, statistical analyst, for whom Japan's highest industrial award for Quality and productivity is named. But in his own country he is not widely recognised. That may be changing. Dr. Deming is working with Nashua Corporation, one of the Fortune 500, a company with sales last year of more than $600,000,000. Deming was hired in late 1979 by Nashua's Chief executive, William E. Conway.

Bill Conway:

And of course our major supplier of copier machines was a Japanese company. And so we saw the advantages of how many things the Japanese companies were doing And we heard about Dr. Deming. And so we got off and got under way with our Quality program with Dr. Deming.

Dr. Deming.

They realised that the gains that you get by statistical methods are gains that you get without new machinery, without new people. Anybody can produce Quality if he lowers his production rate. That is not what I am talking about. Statistical thinking and statistical methods are to Japanese production workers, foremen, and all the way through the company, a second language. In statistical control you have a reproducible product hour after hour, day after day. And see how comforting that is to management: they now know what they can produce, they know what their costs are going to be.

Bill Conway:

Many of these programmes on statistics have died in American companies because they didn't get the top management support. Now, why top management does not believe that this is the way the Japanese have improved their industry over the last 30 years I don't know.

Dr. Deming:

I think that people here expect miracles. American management thinks that they can just copy from Japan – but they don't know what to copy!

Lloyd Dobyns:

But one part of Deming's program is not likely to please them. He insists that management causes 85% of all the problems.

Dr. Deming:

I ask people in management what proportion of this problem arises from your production worker. And the answer is always: All of it! That's absolutely wrong. There's nobody that comes out of a School of Business that knows what management is, or what its deficiencies are. There's no-one coming out of a School of Business that ever heard of the answers that I'm giving your questions – or probably even thought of the questions.

Now, compared with what has been discussed concerning Deming's teaching in Japan 30 years earlier, you may have noticed a strangely narrow emphasis in those extracts : he was mainly back to just talking about statistical methods in a manufacturing context again – just where things had been 55 years earlier! Several years later, when people had begun to appreciate the much greater breadth and depth of his teaching, he was asked why he had reverted to such a narrow focus in that TV programme. He said :

“Because, I thought that, at the time, that was all that people would be able to take.”

He had judged that his American audience would not be able to stomach what he had been teaching the Japanese 30 years earlier: he had to take things more carefully with them. Some new statistics in manufacturing : yes, perhaps Westerners could cope with that. He was deliberately using that narrow focus as a “thin end of the wedge”, hoping that, having made that start, the breadth and depth could grow.

But, however hard he tried to contain himself, his frustration with American management would often come to the boil. It was now more than 30 years since the “Japanese miracle” had begun, and the Americans were still so wrong and still so slow to learn. His final words on Encyclopaedia Britannia's video: Management's Five Deadly Diseases (released in 1984) were :

“With a storehouse of unemployed people – some willing to work, a lot of them willing to work, with skills, knowledge, willingness to work; and people in management unable to work through the merit system, annual rating of performance, not able to deliver what they're capable of delivering. When you think of all the under-use, abuse, and misuse of the people of this country, this may be the world's most underdeveloped nation. Number One – we did it again! We're Number One – for underdevelopment. Our people not used, mismanaged, misused, and abused, and under-used by management that worships sacred cows : a style of management that was never right, but made good fortune for this country between 1950 and 1968 because the rest of the world, so much of it, was devastated. You couldn't go wrong, no matter what you did. Those days are over, and they've been over a long time. It's about time for American management to wake up!”

THE 1980s (SECOND HALF): A NEW CLIMATE

By the late 1980s, Deming's teaching had indeed greatly broadened and deepened. “A New Climate” was the phrase which repeatedly came to my mind. He was now strongly emphasising “Cooperation: Win-Win”, as he coined the phrase ( just as in Japan 35 years earlier ) – not cooperation for some sacrificial, magnanimous, altruistic purpose but simply so that all concerned could gain, and be better off in all respects than if they carried on in the old mode of conflict and destructive competition.

And, in a world which is changing ever-faster, he spoke increasingly of the need not just for improvement but for innovation – in process, in product, in service. How right. And so he would study the kind of management climate in which innovation could flourish. Rather obviously, it would not be the familiar climate of management by fear, conformance, “right first time”, punishment if anything goes wrong. Most innovation does go wrong, but if management cannot accept wrong innovation, they won't get right innovation either.

And for a third strong feature of the “New Climate”, here are Dr. Deming's opening words in Central ITV's “Doctor's Orders.” Before he'd been speaking for even 30 seconds, Deming had come up with what was, to many people, a somewhat unexpected view of the “job of management”:

“Just think what this country could be – think what North America could be – If half the people, even make it 25%, could take pride in their work, could take joy in their work. Things would be a whole lot different from what they are now. Why not give that satisfaction to everybody? That's the job of management!”

A new climate indeed!

Dr. Deming was, of course, now getting quite old – and ill. Indeed he was developing a collection of medical conditions which would have killed off most people much earlier than they did him.

But he knew he was dying. And consciously or unconsciously he knew he must try to develop something which would help those who live after him to understand and continue to develop his life's work. It was toward the end of 1989 that we first heard this extraordinary phrase :

1.5 1990-1993: A SYSTEM OF PROFOUND KNOWLEDGE

Extraordinary, yes – but accurate. This was his attempt, sometimes only with the wisdom of hindsight, to summarise the guts, the core, the essence of his whole life's work. His work is to do with knowledge, understanding, learning – no kidding! And it is profound, it is deep – It's not superficial. And its implications are profound. And it is a system – in an exactly analogous way to how he wanted us to consider organisations as systems: i.e. containing many, many components, but with its strength lying in the understanding of how all those components fit together, how they interlink, how they are interdependent, how they integrate.

One has not begun to comprehend the Deming philosophy of management until that integrated nature of his work becomes predominant in the way that one thinks of it and understands it.

Following is the representation of Deming's System of Profound Knowledge, constructed by Peter Scholtes :

 ( Peter Scholtes is the author of “The Team Handbook” and “The Leader's Handbook” which are available from SPC. ) 

The System of Profound Knowledge is comprised of the four major parts:

·                   Appreciation of a System ( as described here );

·                   Theory of Variation ( right back to where it all started with Shewhart's breakthrough so long ago );

·                   Theory of Knowledge ( how do we know things, how do we learn things, how do we improve that learning and knowledge? );

·                   Psychology ( the understanding of people and the way that they interact with all that surrounds them ).

This is a very human philosophy. And what is so good about Peter's representation is that it illustrates so well that not only are the four parts so important in their own right: again the strength of this system is the way that those parts interlink, inter-relate, and inter-depend. This is a rich legacy.

In winter of 1992 , his friends Dr. Myron Tribus , Bill Scherkenbach , Brian Joiner and others sent in his nomination for the Nobel Peace prize . They considered his contributions more an attempt to promote world peace than merely increase the profitability of an organisation. He was among the final five who were short-listed for the prize . Unfortunately that year the prize was awarded jointly to Yaseer Arafat and Begin for having signed a cease fire to reduce tensions in the Middle East . Unfortunately – because as we can see – they continue to war with each other even now . The world once again ignored the message and works of this great man and his legacy – two economic superpowers built on the foundations of commerce , prosperity and peace....

W. Edwards Deming died on 20 December 1993, at his home in Washington where he had lived since 1946, and just ten days after completing his final four-day seminar in California. It is estimated that at least a quarter of a million people attended his celebrated four-day seminars between 1980 and 1993. As we know, the economic outlook in America has improved in recent years-a lot. How much of that has been due to those quarter of a million people? We will never know .

There was a lot of excitement in Quality management circles when Bill Clinton and Al Gore took office. As just one example, the major feature in the December 1993 issue of Quality Progress ( the monthly magazine of the American Society for Quality ) was “How the Federal Government Is Reinventing Itself”, subtitled “Vice President Gore's National Performance Review report might just be the Quality book of the year.”

Poignantly enough, as December 1993 was also the month when Dr. Deming departed this life. In those final days, he may have recalled what he had said just ten years previously, in an interview reported in The Washington Post , January 1984 :

Question :

You've been very successful in attracting people to these seminars. Isn't that
encouraging to you?

Dr. Deming:

I don't know why it should be. I want to see what they're going to do. It will take years.

Right again! And so, finally, what of ...

1994 and onward: THE FUTURE

As the world grows even more complex and often more cruel, and as technology increasingly provides opportunities to do greater good but, if misused, can also do greater harm, do we not increasingly need the help of the Deming philosophy – Its values, its principles, its logic, its practical guidance? If you feel interested by what you have learned in this short summary, you can examine and study further Dr. Deming's unique work, and then see what you can do with it. Take a little time over it. ( Misquoting the TV commercial: ) it's worth it!

Dr. Deming's work is, hugely important, literally priceless, literally timeless. It is a real source of help and hope for making a better future, materially, socially, and mentally. That was the purpose of Dr. Deming's life work. What better purpose could there be?

Different Deming related bodies are promulgating the Deming Philosophy all over the world . Since Dr. Deming was particular about not consulting with respect to his works – no such commercial body exists . These bodies are more like learning centres where people exchange views , thoughts , and even try to integrate his works with other like minded theorists . Since 1993 , there is an annual Deming Research Seminar conducted by the W. Edwards Deming Institute for precisely this purpose . Some of the different Deming bodies all over the world are :

·          W Edwards Deming Institute – USA

·          The British Deming Forum – UK

·          The Swiss Deming Institute – Switzerland

·          The French Deming Association – France

·          The Russian Deming Association – USSR

·          The Deming Forum ( India ) – India

Finally , the transcription of a very moving account of an incident in Dr. Deming’s life as narrated by Jim McIngvale the owner of Gallery Furniture one of the many who have been impacted by the man’s teachings . It brings out what Dr. Deming – the man – was really all about .  

In finishing, I'd like to talk about the last time I saw Dr Deming.  My son James was very young back then in 1993 and he went to that seminar with me.  It was a four-day seminar.  At that time Dr Deming was 93 years old, he weighed less than 100 pounds, and disease had pretty much ravaged his body. 

He had a big oxygen tank on his belt, and they were pumping oxygen into his nose.  And he did this seminar all day Tuesday, all day Wednesday, all day Thursday.  Friday was the fourth and final day there in Houston.  We were sitting up towards the right of the front row.  He did the first hour and a half's lecture that Friday morning.  He was coughing and wheezing, having a hard time getting through his notes, and shaking.  And came time for the first break there at 9.30 in the morning. 

One of the seminar participants came up to him and said: "Dr Deming, you're old, you're tired, you're sick, you're coughing and wheezing."   He said: "Why don't you cancel the next six hours of the seminar, and go home and get some rest?"   He said: "Nobody will get upset.  Everybody here will understand.  Why, why, why are you doing this?  Why are you punishing yourself?"  I'll never forget - Dr Deming looked him in the eye and said: "I'm doing this because I have a responsibility to make a difference."


Chapter 2: Quality and Management

 

2.1. What is Quality   

The Right Quality and Uniformity are foundations of Commerce , Prosperity and Peace.......

These are the words inscribed on the Deming Prize which is the most coveted prize in Japanese Industry ( and maybe the world ) for Quality .

Quality to different people means different things . Dr. Deming was no different either ! He never really “defined” Quality in the true sense – that is he did not have any official definition for Quality as other practitioners in the field do . But he always had this ability to pack a mountain of understanding in a few words . The definition of Quality as given below is an amalgamation of a few quotes made by Dr. Deming at different seminars / talks which comes as close to a definition if he intended that to be .

But he made an attempt to define Quality in his classic The New Economics . Here , as early as on page 2 , he deals with the question “What is Quality ?” . He then says

“A product or a service possesses Quality if it helps somebody and enjoys a good and sustainable market. Trade depends on Quality.”

Further in Out Of The Crisis on page 26 he says

“Your Customers….need your statement of constancy of purpose – your intention to stay in business by providing product and service that will help man to live better and which will have a market” .

Prof. Henry Neave in his book Deming Dimension states on page 287 explaining the first point of his 14 points……

“constancy of purpose to help man live better materially”………and Prof Neave adds “ and mentally” .

If you combine these three statements made by Dr. Deming himself we get

“A product or a service possesses Quality if it helps someone live better materially and / or otherwise and enjoys a good and sustainable market” .

Let us now analyse this definition part by part .

Starting with the words “helps someone live better” .

In the early seventies , when Harvard Business School was completing 50 years of existence , they had sent out letters to all prominent management theorists in  the field to say a few “kind” words about the science of managing which they were planning to put in a souvenir they were releasing to celebrate the occasion .

One such letter was sent to Dr. Deming . He congratulated the HBS and ended the letter with a query “How does the HBS define Business ?” .  After being 50 years in existence , the HBS realised that they had not defined business in the true sense . But they put their thinking caps on and came up with a beautiful definition

“Business is...creating Value / Satisfaction.....at a profit”...

            Nothing is further from the truth . Not only are all the words important but also the sequence is important . If we’re only creating value without profits..then we are running like a charitable organisation . If we focus only on creating profits with out value – then the best thing to  do is to loot a bank .

The point here is we need to create value or something of value . In other words we need to help create something ( a product or a service ) that will help someone live better . Again the choice of the word better is to say most appropriate . Better being a relative term would imply that no matter how good something can get...or even if it is the best by comparison...it could always get “better” .

Dr. Deming was amongst the first ever in the field of Quality to insist on continual improvement . His choice of the word “better” here conveys exactly the same thing – to continue improving ad nauseum .

He used to describe what he called the Four Prongs of Quality :

·          Innovation of existing Product / Service

·          Innovation of existing Process

·          Improvement of existing Product / Service

·          Improvement of existing Process

His entire Management philosophy centred around creating an environment that was conducive to these four prongs of Quality .

In the book “Out of the Crisis” he describes what he calls as the three corners of Quality as shown in the figure below :

      The same logic can be applied to Service as well . The origins of Dr. Deming’s thoughts on Quality are found in Dr. Shewhart’s 1931 classic “Economic Control of Quality of Manufactured Product” . Dr. Deming has described the chapter on Quality written by Shewhart as a masterpiece in understanding of the word .

 

2.2 Walter Shewhart’s definitions of Quality

The first ever text on the subject of Quality dates back to 1917 – where an Industrial Engineer by the name of George S. Radford published an article in the Journal of Industrial Engineering titled “The Control of Quality in Manufacturing” . He followed this with a book by the same name in the year 1922 . Here he defined Quality as

Characteristics or combination of characteristics that distinguishes one article from another...

Walter Shewhart took the definition of Quality to an altogether different plane . He described Quality as :

·          a set of characteristics

Here Shewhart describes Quality as a combination of different characteristics that give an entity it’s identity . In other words these are a set of characteristics that can be expressed in terms of certain measures and exist independent of any observer . In other words – this is objective Quality .

·          as an attribute

This was an extension of the previous description of Quality . Here Shewhart related Quality to specifications and tolerances . He said that in these cases , those products that met with the specifications and whose measures lay within the tolerance values were said to be conforming or possess a positive attribute – whereas those products that did not meet the specifications or whose measures lay outside the tolerances were said to be non-conforming or possessing a negative attribute .

·          as a distribution function

Here we see Shewhart extending the previous description of Quality and expressing it in terms of statistics . He said that the measures of Quality could be expressed in terms of their Averages , skew ness and dispersions about the nominal value assigned to the characteristic .

·          as a set of values

All the previous descriptions related to the objective dimensions of Quality – that is a set of measures that describe an entity independent of the observer . But the fourth dimension of Quality deals with the subjective side of Quality . He said that this was the most difficult way to describe and define Quality . He brought out four kinds of value that relate to an entity – these are

·          Use

·          Cost

·          Esteem

·          Exchange

He said that there are no measures for such values – but it is the job of every manufacturer to determine these four kinds of value and understand them from the viewpoint of the observer . It is this understanding that would later translate into objective values which can then be met to satisfy the user of the product .

 

Looking at the above discussion – the definitions of Quality given in today’s world seem hopelessly limited . Finally to end this discussion here is what Dr. Deming had to say about Quality in the year 1980 when the ASQ publications decided to reprint Walter Shewhart’s book as a 50th Anniversary commemorative edition .

Quality aimed at , to meet the needs of the consumer , must be stated in terms of specified Quality characteristics that can be measured . It is necessary to predict what Quality – characteristics of a product will produce satisfaction in use .

Quality , however , to the consumer , is not a set of specifications . The Quality of any product is interaction between the product , the user , his expectations , and the service that he can get in case the product fails or requires maintenance .

The needs of the consumer are in continual change . So are materials , methods of manufacture , and products .

Quality of a product does not necessarily mean high Quality . It means continual improvement of the process , so that the consumer may depend on the uniformity of the product and purchase it at low cost .

In other words

·  Quality should be defined with reference to the needs of the internal and external customers in operational terms (operational definitions).

·  Important ingredients of Quality are uniformity( i.e. reduced variability ), pride and joy in work, job security, reliability( reduced time before failure ) and above all customer satisfaction.

·  Quality should not be confused with product category, preference, technology / features, back-up systems / over-design or mere conformance to standards.

·  Quality means going much beyond conformance to specifications or standards towards continual, never-ending improvement and innovation for customer delight which creates loyal customers.

 

2.3 Quality as a Management Strategy – History

When Dr. Deming went to Japan and delivered his lectures on Quality ( or Quality Control as it was known then ) , he gave the Japanese new insights into managing their organisation . Although he did not teach them any of the management practices , he based his lectures on the simple theory that if they worked together to satisfy the Customer instead of just trying to make profits , they would succeed beyond their wildest imagination .

It all seemed very simple . Profits are important – but only profits aren’t everything . Just like eating is important – but only eating is not living . So I told them to channel their efforts towards putting out better product that would meet the needs of the Customer , to further study why the users have bought the product and why the non users have not bought the product and carry out the whole cycle of operations again...and again ...and again...

He then predicted that if the Japanese did what he told them , they would capture the markets in five years . They beat his prediction – it took them only four .

Why does an organisation need to centre its activities on the concept of Quality ? Isn’t quantity a measure of superiority? The bigger the number is – the superior the entity is . In America , the  more  productive  a  company  was  in  terms  of  numbers , the  higher  it  rose  in  the  industrial  world  and  the  share  markets . In  other  words , the  customers  did  not  figure  in  an  organisation’s  reason  for  success . But  there  was  a  reason  this  happened  in  North  America .

After  the  end  of  the  World  War  II , the  country  that  was  least  affected  was  America . The  world  was  in  need  of  products  and  America  responded  to  this  “call”  by  dishing  out  products  in  large  numbers  and  the  customers  all  over  the  world  lapped  them  up  for  want  of  choice . But  half  a  world  away – in  Japan , the  Japanese  businessmen  were  redefining  the  very  foundation  of  businesses . They  turned  their  focus  from  numbers  to  customer  requirements ( Quality ) .

The  Japanese  were  destroyed  after  the  war . They  lost  all  the  territories  they  once  ruled  over , and  as  a  result  of  this  they  lost  their  suppliers  of  natural  resources . They  did  not  have  any  of  their  own , the  only  way  they  could  obtain  any  was  by  exporting  Quality  goods  and  asking  for  food grains ,etc.  in  return . They  had  to  maintain  the  superiority  in  product  Quality  and  as  a  result  of  this ,  their  customer  focus  increased resulting  in  a  vicious  circle  of  improvement . Thus  a  new  economic  age  had  begun .

During  the  Industrial  Revolution , Taylorism  was  at  its  peak . Taylorism – a  term  that  was  coined  after  the  man  who  pioneered  this  style  of  management – Fredrick  Winslow  Taylor – was  a  style  of  management  in  which  planning  was  separated  from  execution . Here  engineers  were  employed  who  would  carry  out “time  and  motion  studies”  and  determine  the  "one  best  way"  to  carry  out  operations  to  complete  the  job  in  the  fastest  possible  way . This  made  the  engineers  decide  how  much  work  could  be  done  in  an  hour , which  made  them  calculate  how  much  work  could  be  done  in  eight  hours - the  time  span  for  a  single  working  day .

This  led  to  working  with  targets . This  also  meant  that  the  worker  did  not  need  to  use  his  mind  when  working – he / she  has  just  to “follow  instructions”  blindly  and  this  would  make  his  bosses  happy . Work  was  broken  down  into  different  tasks . There  existed  a “boss” who  was  in  charge  of  the  workers  who  performed  different  tasks . There  then  was  a  manager  who  was  in  charge  of  getting  the  different  works  done  from  the  different  “bosses” . There  then  was  a  Vice – President  who  was  in  charge  of  the  different  Managers  and  so  on . This gave rise to an hierarchy in the organisation . In  this  hierarchy , no  one  really  was  answerable  to  the  customer . The  President ( now  CEO )  of  the  company  set  targets  for  the  company  in  numbers  for  the  given  financial  year . These  used  to  be  broken  down  into  numbers  for  the  months  by  the  Vice – President ; further  broken  down  into  numbers  for  the  week  by  the  Managers ; further  broken  down  into  numbers  for  the  day  by  the  bosses .

All  this  was  a  very  successful  way  of  achieving  the  targets  in  numbers . The  customer  requirements  were  not  of  prime  importance  at  that  period  of  time . Even  if  they  were  looked  into , it  was  purely  incidental  and  not  systematic . The customer requirements were not communicated precisely top down . Even  if  they  were , the  problems  encountered  on  the  factory  floor  in  meeting  these  requirements  were  totally  ignored  by  the  bosses . This  resulted  in  meeting  numerical  targets  but  the  resources  needed  to  produce  those  numbers  were  enormous  and  not  in  the  right  proportion . Since  the  objectives  were  being  met , nobody  really  paid  much  attention  to  this  inefficiency . In  other  words , since  after World  War  II , the  American  companies  were  in  a  state  of  monopoly  they  didn't  realise  that  they  were  successful  in  spite  of  their  faulty  methods  not  because  of  them !

When  the  Japanese  laid  stress  on  the  customer  as  the  foundation  of  a  business , the  whole  scenario  changed . As  against  in  an  hierarchical  organisation  where  the  information would  flow  top  down ,  information  instead  started  flowing  horizontally  across  the  entire  organisation . All  the  concerned  departments  were  involved  and  all  of  them  were  aligned  towards  the  customer . Marketing  department  personnel  would  carryout  a  detailed  study  on  consumer  requirement / feedback  and  feed  their  findings  to  the  Design  and  Development  Department  which  would  either  create  a  new  design  or  improve  the  existing  one  to  match / exceed  the  customer  requirements . The  important  thing  was  that  the  different  departments  worked  together  to  create  this  product / service . The  new  philosophy  of  constantly  and  forever  improving  was  slowly  replacing  the  old  philosophy  of  “ If  it  ain’t  broke….don’t  fix  it ! ”

            This  prompted  the  Japanese  to  constantly  improve  their  processes , which  resulted  in  greater  efficiency , lesser  scrap , lesser  rework , lesser  costs . The  Japanese  improved  to  the  extent  that  they  could  produce  goods  cheaper , better , and  faster  than  any  other  industrial  nation  in  the  world . 

The two figures below illustrate the difference in the hierarchical approach to managing a business against a systems approach centred on Quality .

 

 

2.4 Process Efficiency and Effectiveness

As is evident from above , Dr. Deming shifted his focus from sorting bad product from good – to designing a process that would create good product in the first place . Two terms have gained a lot of popularity in recent times , thanks to the new version of the ISO 9000 – efficiency and effectiveness . But as we have seen , Dr. Deming was focussing on precisely these two aspects of process management in the 1950s . What do these terms really mean ?

Efficiency – a measure of Inputs

Let us consider two processes A and B . Both are identical processes in terms of the output they produce . However , A is 95 % efficient and B is 70 % efficient . So , in effect , in order to obtain 100 ( output ) from process A we would need to use

100 / 0.95 = 105.3

i.e. 5.3 % extra inputs .

However in order to obtain 100 from process B we would need to use

100 / 0.7 = 142.9

i.e. 42.9 % extra inputs .

So in effect we would get the same output from both processes – but the inputs would be way out of scale . Very often this aspect is ignored by most managers . The famous exhortation – get the job done no matter what – makes employees resort to using resources in the most wasteful ways thus escalating costs . Dr. Deming insisted on understanding processes so thoroughly that we could eliminate the causes of these inefficiencies and create processes that have a high yield with less wastes .

The method he professes to understand processes is “Understanding Variation” and the tool he professes for understanding processes the famous Shewhart Control Chart . In recent times this is being referred to as a Process Behaviour Chart or System Performance Chart . 

Those infected with the virus of inspection to obtain Quality are missing out on the real benefits of improving processes .

Appreciation of the limitations of and the harmful practices associated with inspection.

·   Limitations of inspection.   

a)     It is too late. You cannot inspect Quality into a product /service.

b)     By itself it does not reduce defects and does not result in improvement.

c)      Adds to cost—cost of inspection and cost of defectives.

d)     Does not catch problems built into the system, e.g. inadequate specifications.  

·   Harmful practices associated with inspection.

a)     Multiple inspections—Each considers the other as a “back-up” and none considers himself responsible. It is also de-motivating and demoralising for the employee.

b)      Rewarding inspectors for defects.

c)      Different results with different inspectors—the inspection process itself being “out of control”.

d)     Carrying out analysis of “each and every defect” and taking individual action on the basis of the same. This means mistaking common causes for special causes and amounts to tampering, which often makes things worse.

2.5. Introduction to Understanding Variation.

In the early 1920s Shewhart had a worked with Western Electric and then moved on to the Bell Telephone Laboratories, New York. Western Electric were making efforts to improve the Quality of their telephones – their ambition was to advertise “as alike as two telephones”. But the harder they tried to reduce variation and improve consistency the worse it got ( When any error, mistake or accident occurred they went to work on it and tried to correct it. ). Eventually the problem was referred to Walter Shewhart at the Bell Telephone Laboratories. Walter Shewhart undertook a study of over 4000 processes and came up with a startling discovery .

Variation is present in every process. In fact no two products are alike because any process contains many sources  ( causes ) of variation. When we say that two things are alike we actually mean that the system of measurement we use is not sensitive enough to distinguish a difference or the difference exists but is of no practical importance.

This variation present is of two types .

·          Controlled variation – Variation present due to inherent properties of the process : the way it has been designed, built and setup, the way people have been trained to work on it and so on.

·          Uncontrolled variation – Variation present due to sources outside the process, which prevent it from performing as well as it could if it were so permitted.

However , what Shewhart said further was of even greater importance – he said that controlled variation was caused by a multiple amount of random causes acting simultaneously where no single cause would be predominant .  That meant that you could not assign a particular cause for any variation observed when the variation was controlled within certain limits . He then added that uncontrolled variation was caused by causes alien to the process or outside causes . The variation observed could be attributed to a single cause which was dominant .

He coined terms for these two types of causes of variation :

·          Controlled variation – caused by Random Causes and

·          Uncontrolled variation – caused by Assignable causes

Dr. Deming used different terms for these causes – he often mentioned that he used these for pedagogical reasons .

·          Random Causes – Common Causes

·          Assignable Causes – Special Causes

As a corollary , Shewhart came to the conclusion that there were two types of mistakes committed by process owners :

a)     Treating a fault, complaint, mistake or accident as if it came from a special cause when in fact there was nothing special at all about it—it came from the system i.e. from random variation due to common causes.

b)     Treating any of the above as if it came from a common cause when in fact it was due to a special cause.

Shewhart came to the conclusion that the above mistakes lay at the root of the problem referred to him. Western Electric was failing to understand the difference between common and special causes and that mixing them up was making things worse.

He devised a tool to help distinguish between these two types of variation . He called this the control chart . The control chart is a real time chart that contains three lines – one depicting the average of the measures being studied , the other two lines are the limit lines drawn on either side of the average line . When observations lie within the limit lines , he said that it was not necessary to take any action on the process .  however , if any observations lay outside these lines , these points warrant special attention .

Although Shewhart invented this tool for manufacturing processes , Dr. Deming was the first to use this technique for non-manufacturing processes thus proving the universal application of Shewhart’s Theory of Variation .

Dr. Deming drew some further corollaries from the Control Chart and extended them to managing organisations .

·          He said that the responsibility to identify and remove special causes of variation lay with the owners of the process – those working on the processes on a day to day basis – and that normally these special causes of variation constituted 6 % of the total causes of any variation in  any process .

But removal of these causes of variation is by no means improvement of the process – instead it is merely bringing the process to a state at which it should have been operating in the first place .

·          In contrast the responsibility to identify and remove – or more correctly – reduce the effect of – the common causes of variation lay with management . Normally these causes of variation constitute 94 % of the total variation in any process .

Reduction of the effect of these causes or removal of these causes results in improvement of the process .

As a further corollary he stated his now famous statement :

“Management are responsible for 94 % of the problems in any organisation”

The pivotal role that knowledge of Variation plays in the Deming Philosophy is evident from his following statement:

“If I had to reduce my message for management to just a few words I would say it all had to do with reducing variation.”

 

2.6. Why are conformance to specifications not enough ? or

Why is reducing variation analogous to increasing Quality ?

 

             We generally follow the 'specification approach to quality' which is illustrated below :

 

 

 

 

 

 

 

 

 

 

 

 


In this approach:

  • All values within specifications are considered to be equally good, i.e o.k.
  • All values outside specifications are bad or not o.k
  • Action for improvement in quality is called for only if the values are outside specifications---as long as the values are within specifications, the approach is to 'sit back and relax'.

This approach is not based on reality and is harmful because:

  • It does not take into account the reality that quality varies continuously over the whole range of possible values. It proceeds on the assumption that there is a sudden change in quality at the lower and upper specification limits.
  • It alternates between 'panic' (if outside the specifications) and 'benign neglect' (if within the specifications) and there is no effort to continuously improve quality towards the nominal or 'best' value.
  • The approach is thus antithetical to continuous improvement. 
  • Since action for improvement is taken only when the values go beyond specification limits, chances are that there could be many instances of values very near but within the limits. Again, there would be 'bright chances' of at least some of these values going beyond the limits either due to 'chance combination of multiple factors' or due to even relatively minor 'special causes'. Hence with this approach percentage rejects are bound to be high!  

 

The alternative approach and it's benefits.

   The alternative approach advocated by Dr Deming is based on the Taguchi Loss Function. This is illustrated below :  

 

 

 

 

 

 

 

 

LSL

 

USL

 

Nominal

 

 

LSL: Lower Specification Limit                  USL: Upper Specification Limit

                                                     

The above approach is superior to the conventional specification approach in the following ways:

  • It tells us that there is a loss as long as the relevant parameter is away from the nominal or best value even though it may be within the specification limits. The message is that one should work continuously towards the nominal even when results are within specification limits. This is in contrast to the specification approach which gives us the message to 'sit back and relax' when results are within specification limits---there being 'no loss'. Thus, while the alternative approach guides and helps us to bring about continuous improvement, the specification approach is a major obstacle (to continuous improvement).
  •  In the alternative approach, as a result of efforts to continuously improve towards the nominal, the values of the parameter are kept within much narrower limits than the specification limits. As a consequence, even if special causes enter the system, the chances of the values exceeding specification limits are much less with the alternative approach than if the specification approach is followed. This reduces rejections, rework and warranty costs and ensures smoother, hassle free operations with lesser need for work stoppages.
  • The alternative approach enhances pride and joy in work due to lesser variations and more uniformity of work.
  • Continuous effort to improve processes for reducing variations also enhances knowledge of processes. As a consequence the chances of ever going seriously wrong reduce, resulting in huge savings. 
  • The alternative approach takes into account the reality of 'variations' whereas the specification ignores this important aspect of 'the real world'.

 

Continuous improvement of systems, methods, practices, procedures and processes in place of the present approach for improving quality of work and reducing the level of accidents, failures, unusual occurrences, mistakes etc.; the present approach being :

·          Fixing responsibility, punishing individuals and other individual action.

·           Reliance on inspection / multiple inspection for improving quality of product / service.

The present approach has serious adverse effects on employee morale and  performance in the following ways :

·          Awards & punishments very often cause resentment & demoralise people because in most cases the persons rewarded or punished have not done any thing significantly different from others – the ‘results’ being, in most cases due to chance combination of a multiplicity of factors i.e. Common Causes. Punishment, particularly for accidents, also results in people hiding facts & not admitting faults.

·          Fear of punishment for unusual occurrences leads people to actions to avoid such occurrences at all costs, often at the cost of safety, quality & productivity. Fear of being held responsible for loss of punctuality is a glaring example. For a TXR, who has to take a decision whether to allow a coach with a certain defect to run on line or not, the fear of being held responsible for a punctuality loss is a distinct & near probability while an accident is a remote possibility. So, he decides to allow the train to move, believing that the remote possibility of an accident will not occur!

Individual action is often harmful for the organisation because of the following reasons :

·          If the problem is due to a 'common cause', system changes are required for   bringing about real improvement. Individual action in such cases is  'tampering' and often makes matters worse.

·          After having taken 'individual action', managers get a false sense of satisfaction that they have 'done their job'. They thereby miss the opportunity for improvement which is available if one takes a closer look and studies the existing systems, procedures and practices.

Reliance on inspection /multiple inspection is harmful because:

·     Inspection is too late--you cannot 'inspect' quality into the product / service, as the   defects have already occurred. Inspection can only help identify the defects.

·     For the above reason, inspection is not the route to quality. Since over 95% of defects / problems are due to common causes, it is process / system improvement which is the route to quality.

·     Multiple inspections result in dilution of responsibility – each 'layer' of inspecting officials considers the layer above as a 'back-up'; none considers himself responsible!

·     It is demeaning for any 'worker' to have his / her work inspected upon by a number of people. It lowers his / her prestige and reduces pride and joy in work. The natural consequence of reduced pride in work is poorer quality.

 

In the alternative approach continuous improvement of systems and processes is brought about by:

        a)  Making continuous improvement a way of life.

             How does this happen? 

             This happens by: 

·          Improved understanding of the reality, changes in belief systems and attitudes brought about by 'profound knowledge'. For example, knowledge of variations leads to the conviction that reality is not made up of right & wrong, good & bad, o.k. and not o.k., but comprises of a continuous gradation of quality from one end of the spectrum of possibilities to the other.

·          Seeking out problems – welcoming them as opportunities for improvement.

This is in contrast to the conventional approach in which problems are not welcomed at all but considered as something which better not exist! Similarly complaints are also welcomed as opportunities for improvement. This approach helps to 'nip them in the bud' and tackles problems much before they have assumed alarming proportions.

     In fact the definition of a problem is itself widened to include any aspect of   working in which one can identify definite scope for improvement.

·          Change from 'result-orientation' to 'process orientation'.

   

c)     Understanding of systems & process and use of flow charts. 

Working on the system with an understanding of systems and processes is important for bringing about system improvements. For arriving at a deep understanding of the system / process one must know: What are the inputs? What are the outputs? How do the inputs influence the process and the outputs? How are the outputs influenced by the process and by the inputs

    

  What should management do?

·        In order to encourage process thinking, breaking down barriers between departments is very important. A practical way of doing this is for people of different departments to get together and list out the inputs and outputs of the process. This simple exercise itself can lead to a much better understanding of the process and help in bringing about improvement.

·        Flow charts help in understanding the system. The very exercise of constructing a valid flow chart leads straightaway to some improvement. ('Valid' here means what actually happens, not what is supposed to happen!)

·        Whether in the form of flow charts or textual, a system does need to be documented to indicate what actually happens. If a system cannot be written down it probably does not exist!

·        Management must avoid the danger of sub-optimisation. This danger arises when attempts are made to improve the system by making changes without considering the ramifications of such changes on all the outputs.

             To avoid this danger, management must encourage communication and co-  operation between the component sub-processes of a system so that there is knowledge of the inter-relationships between all the components of the system and everybody that works in it. This is important because of the interdependence between components of a system.