LEARNING OBJECTIVES

Explain W. Edwards Deming’s Theory of Management.

Discuss Deming’s 14 Points for Management.

Discuss the paradigm shift in management caused by Deming’s theory of management.

A Better Way…

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A LEADER IN THE QUALITY REVOLUTION

W. Edwards Deming

War on Bad Quality

War on Wasted Production Costs.

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W . EDWARD DEMING

Ph.D. in physics and trained as a statistician

Western Electric in the 1920s and 30s

After World War II helped Japan implement his statistical quality control

Deming became known in 1980 when the broadcast program entitled If Japan Can…Why Can’t We?

Credited with having the greatest influence on quality management

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W . EDWARD DEMING CONT.

responsibility for quality improvement lies with top management

85 to 95 % of variation results from the system

majority of poor quality in a system is caused by management

higher levels of quality lead to higher levels of productivity

Quality philosophy focused on reducing uncertainty and variability

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BRIEF HISTORY OF

QUALITY The front (left) side of the “Narmer Palette” shows 6 papyrus reeds under a falcon. Each papyrus reed represents 1,000 enemies captured by King Narmer. This Is a pictograph and is one of the earliest uses of statistics.

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DEMING CHAIN REACTION

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Another example of a quality issue in ancient times is found in the Code of Hammurabi dating from as early as 2000 BC. Item 229 states, "If a builder has built a house for a man, and his work is not strong, and the

house falls in and kills the householder, that builder shall be slain."

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TRADITIONAL VIEW OF CONFORMANCE TO SPECIFICATIONS

No Loss LossLoss

Tolerance

0 +1/16-1/16

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MODERN MANAGEMENT

frequently operates using the following assumptions (often without realizing it):

1. Rewards and punishments are the most effective motivators for people…

2. Optimization of every area in an organization leads to optimization of the entire organization…

3. Results are achieved by setting objectives…

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MODERN MANAGEMENT

4. Quality is inversely related to quantity…

5. Rational decisions can be made based on guesswork and opinion…

6. Organizations can be improved by fighting fires…

7. Competition is a necessary aspect of life…

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PURPOSE

Deming's theory of management promotes “Joy in Work” for all of the stakeholders of an organization.

Deming believed that joy in work will “unleash the power of human resource contained in intrinsic motivation. Intrinsic motivation is the motivation an individual experiences from the sheer joy of an endeavor.”

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4 Paradigms

Think of each as a shift in assumptions for the practice of management.

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1. People are best inspired by a mix of intrinsic and extrinsic motivation, not only by extrinsic motivation.

2. Manage using both a process and results orientation, not only a results orientation.

3. Management's function is to optimize the entire system so that everyone wins, not to maximize only their component of the system.

4. Cooperation works better than competition, if the aim of the system is not to win.

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SYSTEM OF PROFOUND KNOWLEDGE

Appreciation for a system

Understanding variation

Theory of knowledge

Psychology

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SYSTEMS

A system is a set of functions or activities within an organization that work together for the aim of the organization.

Components must work together

Management must optimize the system

Every system must have a purpose

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VARIATION

Many sources of uncontrollable variation exist (common causes)

Special (assignable) causes of variation can be recognized and controlled

Failure to understand these differences can increase variation in a system

Taguchi philosophy seeks to minimize variation around a target value (Fishbone diagram)

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SOURCES OF VARIATION IN A PROCESS

Materials

Tools

Operators Methods Measurement Instruments

HumanInspection

PerformanceEnvironmentMachines

INPUTS PROCESS OUTPUTS

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THEORY OF KNOWLEDGE

Knowledge is not possible without theory

Experience alone does not establish a theory, it only describes (“Ive been doing this for 30 years”)

Theory shows a cause and effect relationship that can be used for prediction

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PSYCHOLOGY

Sincere trust and belief in people

Understanding of how people work in systems

People are motivated intrinsically and extrinsically; intrinsic motivation is the most powerful

Fear is demotivating

Managers should develop pride and joy in work

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PEOPLE ARE DIFFERENT

They learn in different ways and at different speeds.

A leader of people must use these differences to optimize the system of interdependent stakeholders of an organization.

Sources of power

Power from position Power from personality Power from knowledge

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DEMING’S 14 POINTS (ABRIDGED) (1 OF 2)

1. Create and publish a company mission statement and commit to it.

2. Learn the new philosophy. - Customer driven continuous improvement

3. Understand the purpose of inspection. - workers must be responsible for their work

4. End business practices driven by price alone. - Price has no meaning without quality

5. Constantly improve production and service as a system.6. Institute training. - Job specific training

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DEMING’S 14 POINTS (2 OF 2)

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7. Teach and institute leadership.

8. Drive out fear and create trust.

9. Optimize team and individual efforts.

10. Eliminate exhortations for work force. -Giving advise

11. Eliminate numerical quotas and M.B.O. -Focus on improvement.

12. Remove barriers that rob people of pride of workmanship.

13. Encourage education and self-improvement.14. Take action to accomplish the transformation.

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DEMING PRIZE

Instituted 1951 by Union of Japanese Scientists and Engineers (JUSE) in Japan

Several categories including prizes for individuals, factories, small companies, and Deming application prize

American company winners

– Florida Power & Light (first U.S. winner)

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