Everything about William Edwards Deming totally explained
William Edwards Deming (
October 14,
1900–
December 20,
1993) was an
American statistician, college professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during
World War II, although he's perhaps best known for his work in
Japan. There, from 1950 onward he taught top management how to improve design (and thus service), product quality, testing and sales (the last through global markets) through various methods, including the application of statistical methods. Deming made a significant contribution to Japan's later renown for
innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese
manufacturing and
business than any other individual not of Japanese heritage. Despite being considered something of a hero in Japan, he was only beginning to win widespread recognition in the U.S. at the time of his death.
Overview
Ford Motor Company was simultaneously manufacturing a car model with transmissions made in Japan and the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the USA-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers couldn't understand the customer preference for the model with Japanese transmission. It delivered smoother performance with a lower defect rate. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts had much closer tolerances than the USA-made parts - for example if a part was supposed to be one foot long, plus or minus 1/8 of an inch - then the Japanese parts were within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems. This is an example of Dr. Deming's teachings, having been adopted by the Japanese, delivering better quality products .
Deming was born in
Sioux City, Iowa. He received a
B.S. in
electrical engineering from the
University of Wyoming at
Laramie (1921), an
M.S. from the
University of Colorado (1925), and a
Ph.D. from
Yale University (1928). Both graduate degrees were in mathematics and physics. Deming had an internship at
Bell Telephone Laboratories while studying at Yale. He subsequently worked at the U.S. Department of Agriculture and the Census Department. While working under Gen. Douglas MacArthur as a census consultant to the Japanese government, he famously taught statistical process control methods to Japanese business leaders, returning to Japan for many years to consult and to witness economic growth that he'd predicted as a result of application of techniques learned from
Walter Shewhart at Bell Laboratories. Later, he became a professor at
New York University while engaged as an independent consultant in Washington, D.C.
Deming was the author of
Out of the Crisis (1982–1986) and
The New Economics for Industry, Government, Education (1993), which includes his System of Profound Knowledge and the 14 Points for Management (described below). Deming played flute & drums and composed music throughout his life, including sacred choral compositions and an arrangement of
The Star Spangled Banner.
In 1993, Deming founded the
W. Edwards Deming Institute in
Washington, D.C., where the Deming Collection at the U.S.
Library of Congress includes an extensive audiotape and videotape archive. The aim of the W. Edwards Deming Institute is to foster understanding of The Deming System of Profound Knowledge to advance commerce, prosperity and peace.
Early life and work
Born in
Sioux City, Iowa, Deming was raised in
Polk City, Iowa on his grandfather's chicken farm, then later in
Powell, Wyoming. His father's name was also William, so he was called Edwards (the maiden name of his mother, Pluma Irene Edwards). In 1917, he enrolled in the
University of Wyoming at
Laramie, graduating in 1921 with a
B.S. in
electrical engineering. In 1925, he received an
M.S. from the
University of Colorado, and in 1928, a
Ph.D. from
Yale University. Both graduate degrees were in
mathematics and
mathematical physics. Deming worked as a mathematical physicist at the
United States Department of Agriculture (1927–39), and was a statistical adviser for the
United States Census Bureau (1939–45). He was a professor of statistics at
New York University's graduate school of business administration (1946–1993), and he taught at
Columbia University's graduate School of business (1988–1993). He also was a consultant for private business.
In 1927, Deming was introduced to
Walter A. Shewhart of the
Bell Telephone Laboratories by Dr. C.H. Kunsman of the
United States Department of Agriculture (USDA). Deming found great inspiration in the work of Shewhart, the originator of the concepts of statistical control of processes and the related technical tool of the
control chart, as Deming began to move toward the application of statistical methods to industrial production and management. Shewhart's idea of common and special causes of variation led directly to Deming's theory of management. Deming saw that these ideas could be applied not only to manufacturing processes but also to the processes by which enterprises are led and managed. This key insight made possible his enormous influence on the economics of the industrialized world after 1950.
Deming edited a series of lectures delivered by Shewhart at USDA,
Statistical Method from the Viewpoint of Quality Control, into a book published in 1939. One reason he learned so much from Shewhart, Deming remarked in a videotaped interview, was that, while brilliant, Shewhart had an "uncanny ability to make things difficult." Deming thus spent a great deal of time both copying Shewhart's ideas and devising ways to present them with his own twist.
Deming developed the sampling techniques that were used for the first time during the 1940
U.S. Census. During World War II, Deming was a member of the five-man Emergency Technical Committee. He worked with H.F. Dodge, A.G. Ashcroft, Leslie E. Simon, R.E. Wareham, and John Gaillard in the compilation of the
American War Standards (
American Standards Association ZI.1-3 published in 1942) and taught
statistical process control (SPC) techniques to workers engaged in wartime production. Statistical methods were widely applied during World War II, but faded into disuse a few years later in the face of huge overseas demand for American mass-produced products.
Work in Japan
In 1947, Deming was involved in early planning for the 1951
Japanese Census. The
Allied powers were
occupying Japan, and he was asked by the U.S.
United States Department of the Army to assist with the census. While Deming was there, his expertise in quality control techniques, combined with his involvement in Japanese society, led to his receiving an invitation from the
Japanese Union of Scientists and Engineers (JUSE). Deming's message to Japan's chief executives: improving
quality will reduce expenses while increasing
productivity and market share.
Honors
In 1960, the Prime Minister of Japan (
Nobusuke Kishi), acting on behalf of
Emperor Hirohito, awarded Dr. Deming Japan’s
Order of the Sacred Treasure, Second Class. The citation on the medal recognizes Deming's contributions to Japan’s industrial rebirth and its worldwide success. The first section of the meritorious service record describes his work in
Japan:
Later, from his home in
Washington, D.C., Dr. Deming continued running his own consultancy business in the
United States, largely unknown and unrecognized in his country of origin and work. In 1980, he was featured prominently in an
NBC documentary titled
If Japan can... Why can't we? about the increasing industrial competition the United States was facing from Japan. As a result of the broadcast, demand for his services increased dramatically, and Deming continued consulting for industry throughout the world until his death at the age of 93.
Ford Motor Company was one of the first American corporations to seek help from Deming. In 1981, Ford recruited Deming to help jump-start its quality movement. Ford's sales were falling. Between 1979 and 1982, Ford had incurred $3 billion in losses. 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. After 1982, 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." 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 wasn't 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."
Over the course of his career, Deming received dozens of academic awards, including another, honorary, Ph.D. from
Oregon State University. In 1987 he was awarded the
National Medal of Technology: "For his forceful promotion of statistical methodology, for his contributions to sampling theory, and for his advocacy to corporations and nations of a general management philosophy that has resulted in improved product quality." In 1988, he received the
Distinguished Career in Science award from the
National Academy of Sciences.
Deming philosophy synopsis
The philosophy of W. Edwards Deming has been summarized as follows:
» "Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces."
In the 1970s, Dr. Deming's philosophy was summarized by some of his Japanese proponents with the following 'a'-versus-'b' comparison:
» (a) When people and organizations focus primarily on quality, defined by the following ratio,
» :
» quality tends to increase and costs fall over time.
» (b) However, when people and organizations focus primarily on
costs (often dominant/typical human behavior), costs (due to not minimizing waste, ignoring amount of rework occurring, taking staff for granted, not rapidly resolving disputes, and failing to notice lack of product improvement—plus, over time, loss of customer loyalty) tend to rise and quality declines over time.
The Deming System of Profound Knowledge
"The prevailing style of management must undergo transformation. A system can't understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view—a lens—that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.
"The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.
"Once the individual understands the system of profound knowledge, he'll apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:
- Set an example;
- Be a good listener, but won't compromise;
- Continually teach other people; and
- Help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past."
Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts:
Appreciation of a system: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services (explained below);
Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements;
Theory of knowledge: the concepts explaining knowledge and the limits of what can be known (see also: epistemology);
Knowledge of psychology: concepts of human nature.
Deming explained, "One need not be eminent in any part nor in all four parts in order to understand it and to apply it. The 14 points for management in industry, education, and government follow naturally as application of this outside knowledge, for transformation from the present style of Western management to one of optimization."
"The various segments of the system of profound knowledge proposed here can't be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation.
"A manager of people needs to understand that all people are different. This isn't ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management. A psychologist that possesses even a crude understanding of variation as will be learned in the experiment with the Red Beads (Ch. 7) could no longer participate in refinement of a plan for ranking people."
The Appreciation of a system involves understanding how interactions (for example feedback) between the elements of a system can result in internal restrictions that force the system to behave as a single organism that automatically seeks a steady state. It is this steady state that determines the output of the system rather than the individual elements. Thus it's the structure of the organization rather than the employees, alone, which holds the key to improving the quality of output.
The Knowledge of variation involves understanding that everything measured consists of both "normal" variation due to the flexibility of the system and of "special causes" that create defects. Quality involves recognizing the difference in order to eliminate "special causes" while controlling normal variation. Deming taught that making changes in response to "normal" variation would only make the system perform worse. Understanding variation includes the mathematical certainty that variation will normally occur within six standard deviations (thus six sigma: the symbol for standard deviation) of the mean.
The System of Profound Knowledge is the basis for application of Deming's famous 14 Points for Management, described below.
Deming's 14 points
Deming offered fourteen key principles for management for transforming business effectiveness. The points were first presented in his book Out of the Crisis (p. 23-24).
Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease cost.
Institute training on the job.
Institute leadership (see Point 12 and Ch. 8 of "Out of the Crisis"). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
Drive out fear, so that everyone may work effectively for the company. (See Ch. 3 of "Out of the Crisis")
Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (See CH. 3 of "Out of the Crisis").
Institute a vigorous program of education and self-improvement.
Put everybody in the company to work to accomplish the transformation. The transformation is everybody's work.
Seven Deadly Diseases
The Seven Deadly Diseases:
Lack of constancy of purpose.
Emphasis on short-term profits.
Evaluation by performance, merit rating, or annual review of performance.
Mobility of management.
Running a company on visible figures alone.
Excessive medical costs.
Excessive costs of warranty, fueled by lawyers who work for contingency fees.
A Lesser Category of Obstacles:
Neglecting long-range planning.
Relying on technology to solve problems.
Seeking examples to follow rather than developing solutions.
Excuses, such as "Our problems are different."
Quotations and concepts
In his later years, Dr. Deming taught many concepts, which he emphasized by key sayings or quotations that he repeated. A number of these quotes have been recorded.
Some of the concepts might seem to be oxymorons or contradictory to each other; however, the student is given each concept to ponder its meaning in the whole system, over time.
"There is no substitute for knowledge." This statement emphasizes the need to know more, about everything in the system. It is considered as a contrast to the old statement, "There is no substitute for hard work" by Thomas Alva Edison (1847–1931). Instead, a small amount of knowledge could save many hours of hard work.
"The most important things can't be measured." The issues that are most important, long term, can't be measured in advance. However, they might be among the factors that an organization is measuring, just not understood as most important at the time.
"The most important things are unknown or unknowable." The factors that have the greatest impact, long term, can be quite surprising. Analogous to an earthquake that disrupts service, other "earth-shattering" events that most affect an organization will be unknown or unknowable, in advance. Other examples of important things would be: a drastic change in technology, or new investment capital.
"Experience by itself teaches nothing." Management’s job. It is management’s job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it. Everyone must understand the damage and loss to the whole organization from a team that seeks to become a selfish, independent, profit centre."
"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!" Dr. Deming renamed these distinctions "common cause" for chance causes and "special cause" for assignable causes. He did this so the focus would be placed on those responsible for doing something about the variation, rather than the source of the variation. It is top management’s responsibility to address "common cause" variation, and therefore it's management’s responsibility to make improvements to the whole system. Because "special cause" variation is assignable, workers, supervisors or middle managers that have direct knowledge of the assignable cause best address this type of specific intervention. Deming realized that many important things that must be managed couldn’t be measured. Both points are important. One, not everything of importance to management can be measured. And two, you must still manage those important things. Spend $20,000 training 10 people in a special skill. What's the benefit? "You'll never know," answered Deming. "You'll never be able to measure it. Why did you do it? Because you believed it would pay off. Theory." Dr. Deming is often incorrectly quoted as saying, "You can't manage what you can't measure." In fact, he stated that one of the seven deadly diseases of management is running a company on visible figures alone.
"By what method?"
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