1.1 THE EARLY 1900S: THE
many students these days,
1925 and 1926,
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.
breakthrough in understanding variation ( for it was nothing less ) proved to
be the foundation stone of
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.
fragment of the speech (2) which
“...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.
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 ).
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
Remember that description of this era: you will see in a moment where it comes from.
“There you are. I told you so. This
Well , this is as far from the
truth as one can get .
“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” .
”Is Japanese management to be
infected with the diseases of western management ? Rating people ? Japanese
management has an obligation to
He also said in a private
conversation with one of his friends that he did notice some of the wrong
practices being introduced in
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,
treated the Japanese with warmth and respect and humanity. In a short piece of
film from post-war
“Japanese top management, and
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
lectures are being held at the Japan Medical Association in Ochanomizu. ...
Over 600 men had applied, and the limit was finally overstrained to 230.
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
[ 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.
is also well worth quoting from his final book: The New Economics for Industry, Government,
Education. A section (6) titled with the question: “What
diagram was the spark that in 1950 and onward turned
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:
6. Need for trust and cooperation between companies.
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
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?
A question mark. Because there is relatively little knowledge of what was happening with Deming during this decade.
still working very hard, lecturing regularly at the
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.
Japanese contacts, an American Chief Executive did at last discover Deming in
1979, and began to listen and learn. This was
“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,
( 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?”
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
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
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.
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.
I think that people here expect miracles. American
management thinks that they can just copy from
But one part of Deming's program is not likely to please them. He insists that management causes 85% of all the problems.
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
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!”
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
A new climate indeed!
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 :
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.
is the representation of Deming's System of Profound Knowledge, constructed by
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.
of 1992 , his friends
a lot of excitement in Quality management circles when
enough, as December 1993 was also the month when
You've been very successful in attracting people to
these seminars. Isn't that
encouraging to you?
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 ...
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
Deming related bodies are promulgating the Deming Philosophy all over the world
W Edwards Deming Institute –
The British Deming Forum –
The Swiss Deming Institute –
The French Deming Association –
The Russian Deming Association –
The Deming Forum (
the transcription of a very moving account of an incident in
In finishing, I'd like to talk about
the last time I saw
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
One of the seminar participants came
up to him and said: "
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 .
to different people means different things .
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” .
“constancy of purpose to
help man live better materially”………and
combine these three statements made by
“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 .
such letter was sent to
“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” .
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
first ever text on the subject of Quality dates back to 1917 – where an
Industrial Engineer by the name of
Characteristics or combination of characteristics that distinguishes one article from another...
· 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
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 .
at the above discussion – the definitions of Quality given in today’s world
seem hopelessly limited . Finally to end this discussion here is what
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
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 ,
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 .
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.
the early 1920s Shewhart had a worked with Western Electric and then moved on
to the Bell Telephone Laboratories,
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
· 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 .
Shewhart invented this tool for manufacturing processes ,
· 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:
This approach is not based on reality and is harmful because:
The alternative approach and it's benefits.
The alternative approach advocated by
The above approach is superior to the conventional specification approach in the following ways:
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.