Edward Deming

Discussion in 'Business & Economics' started by kmguru, Oct 19, 2008.

  1. kmguru Staff Member

    This may be a good time to revisit the teachings of Edward Deming and how this can rejuvenate American Business and Economy.


    some excerpts:

    Ford Motor Company was one of the first American corporations to seek help from Deming. In 1981, Ford's sales were falling. Between 1979 and 1982, Ford had incurred $3 billion in losses. Ford's newly appointed Division Quality Manager John A. Manoogian was charged with recruiting Dr. Deming to help jump-start a quality movement at Ford. [15] Deming questioned the company's culture and the way its managers operated. To Ford's surprise, Deming talked not about quality but about management. He told Ford that management actions were responsible for 85% of all problems in developing better cars. In 1986 Ford came out with a profitable line of cars, the Taurus-Sable line. In a letter to Autoweek Magazine, Donald Petersen, then Ford Chairman, said, "We are moving toward building a quality culture at Ford and the many changes that have been taking place here have their roots directly in Dr. Deming's teachings."[16] By 1986, Ford had become the most profitable American auto company. For the first time since the 1920s, its earnings had exceeded those of arch rival General Motors (GM). Ford had come to lead the American automobile industry in improvements. Ford's following years' earnings confirmed that its success was not a fluke, for its earnings continued to exceed GM and Chrysler's.

    In 1982, Dr. Deming, as author, had his book published by the MIT Center for Advanced Engineering as Quality, Productivity, and Competitive Position, which was renamed Out of the Crisis in 1986. Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved products and services. "Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment."

    Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts:

    1. Appreciation of a system: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services (explained below);
    2. Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements;
    3. Theory of knowledge: the concepts explaining knowledge and the limits of what can be known (see also: epistemology);
    4. Knowledge of psychology: concepts of human nature.
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  3. kmguru Staff Member

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  5. OilIsMastery Banned Banned

    Excellent post.

    I suspect finding a manager with Profound Knowledge might be as difficult (futile?) as finding an honest man...

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  7. kmguru Staff Member

    What Deming taught for the individual companies and products, we need a similar plan for the entire country....cooperation rather than competition. But Competition is now in our DNA...so rough times may be ahead....
  8. desi Valued Senior Member

    Everyone wants to be one up on everyone else. The ones who don't fall behind the ones who do. So the manager who can cut costs will look good for a quarter while quality gets dicey which kills the next 8 quarters due to customers who got pissed from the quarter where corners were cut.
  9. kmguru Staff Member

    Yesterday, I watched Charlie Rose show who had John Doerr, Jeffrey Immelt, James Wolfensohn, Meg Whitman and Anand Mahindra as the panel on Leadership. No one seemed to have a clue as to what to do in this economic crisis. This is the same Meg Whitman who my company sent a proposal to solve their Fraud issues several years back and she passed on to the underlings who did nothing. If Leadership is about passing the buck - those people are in the right place.
  10. Read-Only Valued Senior Member

    You make that last statement like it's something new, but competition has always been a basic human factor.

    Also, I noted that something very important wasn't mentioned at all (though I'm sure it would appear in the link you provided). Deming spoke to about 80% of Japan's management five years after the close of WWII and is credited with providing much of the foundation upon which Japan found it's way into international commerce. He helped them design a management system that formed the very core of their industrial rebirth.

    As a side note, the entire company (a VERY large one) I worked for in the 1960s went through a Deming course. It was very, very good.

    One other major point worth noting, since your statements seem to indicate otherwise. Although Deming plan promoted cooperativeness internally, it's ultimate goal WAS to promote competitiveness externally.
  11. quantum_wave Contemplating the "as yet" unknown Valued Senior Member

    Hence the Baldrige awards and the Deming prize.

    promotes and recognizes organizational performance excellence. See http://www.nist.gov/


    The Deming prize, established in December 1950 in honor of W. Edwards Deming, was originally designed to reward Japanese companies for major advances in quality improvement. Over the years it has grown, under the guidance of Japanese Union of Scientists and Engineers (JUSE) to where it is now also available to non-Japanese companies, albeit usually operating in Japan, and also to individuals recognized as having made major contributions to the advancement of quality. The awards ceremony is broadcast every year in Japan on national television.
  12. kmguru Staff Member

    How so?

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