William Edwards Deming
Total Quality Management (TQM)
Voted on as one of the 50 Most Influential People in Business in the last century, W. Edward Deming has helped redirect the focus of many businesses – namely those in post World War II Japan. Deming’s Total Quality Management (TQM) philosophy in the manufacturing sector focuses on continuous improvement in the production process while maintaining a primary focus on customer satisfaction.
Deming’s philosophy, although having been refined and redefined over the last 50 years, is not fully accepted by all business experts. While focusing resources on identifying and eliminating inefficiencies in the manufacturing process is widely accepted as a positive in any business, the opponents of Deming’s philosophy argue that his system requires too many rapid changes that are too demanding on limited assets.
A key to Deming’s TQM philosophy is that it requires a new definition of the manager/subordinate system to a teacher/student system. American business leaders, who are typically attracted to power and control, struggle to accept the change and view a shift of power to the employee as a risky move. While apprehension persists in America, business leaders need look no further than post-war Japan for an example of the rewards that can be gained by adopting Deming’s philosophy. With dedicated workers and a reputation of inexpensive, reliable products, Japanese companies like Toyota and Honda owe a portion of their success to Deming’s ideals of shared responsibility within an organization and continuous improvement throughout the business cycle.
When implemented properly and with full dedication, Deming’s Total Quality Management philosophy should be adopted by businesses – especially those in the manufacturing sector. Deming’s focus on open communication between workers and managers helps to promote a highly productive business that aims to eliminate efficiencies and eventually lead to greater income.
With increasing levels of competition amongst business organizations, both nationally and internationally, companies have found it necessary to review their quality management programs to ensure that their products and services remain competitive in a highly globalized market. The last century has seen the advent of various quality management systems (QMS) that have aimed to improve value along supply and value chains, but no method has received more attention than that of W. Edwards Deming—an American statistician, professor, author, lecturer, and consultant on quality.
From the 1920s to 1940s Deming worked as a mathematical physicist at the United States Department of Agriculture (1927–39) and as a statistical adviser for the United States Census Bureau (1939–45). He successfully introduced the use of statistical process control to monitor census operations and during World War II he developed a statistical quality-control course which was taught to engineers that worked for suppliers to the military. By the 1950s Deming had earned an international reputation for his quality control techniques and he soon began providing consulting services to various Japanese industries. In Japan he became known as “the father of quality control” and has since become known as the catalyst of a worldwide quality movement.
Deming's approach to quality management discourages the use of final product inspection in lieu of a system that seeks continuous improvement of the production process. Continuous improvement aims to achieve conformance to specifications and reduce variability through use of statistical quality-control techniques. He has identified 2 primary sources of process improvement:
- Eliminating common causes of quality problems (such as poor product design and insufficient employee training)
- Eliminating special causes (such as specific equipment or an operator)
Deming approached QMS from two perspectives, the customer's and the producer's, but emphasized the need to base final design decisions on the needs of consumers. His QMS methods were deeply rooted in the ideology that quality improvement was the sole responsibility of employee's and managers. He encouraged employee involvement at all levels within an organization and encouraged extensive training. Prevention is a key element of his methodology where consumers reign supreme. Deming once stated, “The consumer is the most important part of the production line. Quality should be aimed at the needs of the consumer, present and future”.
Deming presented fourteen key principles in his book, Out of the Crisis, that outline his overall philosophy for achieving improvement:
- 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 massive inspection 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 costs.
- Institute training on the job.
- Institute leadership. 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.
- 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.
- 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 job.
Additionally, Deming identified seven “deadly diseases” that stand in the way of transformation:
- 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
The principles outlined above have been credited for the launch of the quality movement and are the foundation for modern QMS and Total Quality Management (TQM) processes.
Pros and Cons
Deming’s Total Quality Management (TQM) philosophy has been widely accepted and praised for its innovative ideas and “real world” applicability. Most can agree that Deming’s fourteen principles of TQM, with their customer-centric focus and unwavering pursuit of quality in manufacturing, helped modernize and revitalize the American manufacturing industry; particularly Ford Motor Company.
Supporters point to several key advantages for implementing Total Quality Management systems. TQM is able to take small-scale improvements at all levels of management/manufacturing processes and reap the benefits of their cumulative effect. As manufacturing processes are continually improving by becoming more streamlined and efficient; companies are able to “free up” resources which can be devoted to maximizing quality and value for the end-user.
Suppliers also benefit greatly from the implementation of TQM systems. Emboldened by the security of long-term contracts that TQM affords, suppliers are able to devote their attention towards innovative products with much higher tolerances. In addition, since purchasers are able to depend on quality parts from a select few suppliers, the overall time needed for the inspection of parts received is greatly reduced. Companies that utilize a few trusted suppliers may also benefit in the reduction of administrative expenses due to the utilization of fewer shipping points.
Companies that embrace Deming’s TQM system can enjoy a dedicated workforce; all of whom have a vested interest in the success of quality systems that have been implemented. Deming’s philosophy of breaking down barriers between management and frontline employees by forming “quality circles” of team members helps foster the development of new ideas and flatten the hierarchy of the decision-making process. This philosophy has the opportunity to boost morale by placing the commitment to quality on each and every member of the company.
While Deming’s TQM system has many supporters, it is not without its critics. Naysayers’ opinions vary wildly; from TQM invoking too much change, while others argue not enough change to production processes. Still, others have suggested that Deming’s ground-breaking ideas and philosophies have naturally evolved into the modern business management strategy known as Six Sigma.
Those that would argue TQM invokes too much change too soon; suggest that, in order to facilitate the organizational change needed to reach long-term goals, a company will be forced to proceed haphazardly. This swift undertaking will negate any of the possible benefits from the new processes, while simultaneously alienating team members who are reluctant to deviate from the status quo.
As for those that would suggest that TQM does not advocate enough change to business management and manufacturing processes; argue that, “…while TQM systems call for organizational change it does not demand radical organizational reform.” This theory suggests that, in order for the necessary change needed to bolster sustainable improvement in quality, drastic structural change is mandatory. However, this would be unattainable due to the inherent bureaucracy of TQM systems, which could lead to, “stifling control systems and the tyranny of functionalism, both of which stifle teamwork.”
Finally, Deming’s principles call for the elimination of numerical quotas and work standards such as job evaluations that assess employees’ performance. Frontline workers may not be able to provide documentation of positive job evaluations during grievance hearings or compensation reviews. Managers may not be able to justify employee terminations or proposed pay increases without substantiated evidence. While these issues may seem inconsequential, “word of mouth” regarding such incidences within a firm may quickly spread and have long-lasting negative effects on employee morale and prove to be detrimental to the corporate culture as a whole.
The debate will continue regarding the proper application of TQM systems, but few would argue that Deming’s contribution to statistical analysis of manufacturing and forward-thinking management principles were not monumental both for their insightfulness and their limitless range of applications.
Risks and Rewards
It was not that U.S. companies ignored William E. Deming’s philosophy of Total Quality Management as much as the fact that his work had gone unnoticed for many years. Implementation of his philosophies began in Japan following World War II, however it was not until the airing of the NBC documentary in 1980 titled, “If Japan can…why can’t we?” that U.S. companies began to take an interest.
As stated in Chapter 4 of Deming’s book, The New Economics, “The prevailing style of management must undergo transformation”. This approach involved an overhaul of Western Management and required a shift in power from a manager/subordinate system to a teacher/student system. Rather than simply having authority and using laborers to achieve the organization’s goals, management would be seen as teachers who pass their knowledge along to the workers. This philosophy would optimize the entire manufacturing process with contributions from all levels of the workforce. However, issues with implementing this type of system did exist. Western management techniques appealed to individuals who were attracted to power and control. These individuals and their personalities would be reluctant to support a change that relinquished the career attributes they craved most. Deming’s solution was simple. Accepting the new approach would phase out the old style of management over time with younger managers coming in with different beliefs. Regardless, full adoption of Deming’s approach includes discontinuing a widely accepted management system and depending on the individual to see beyond personal benefits for the good of the organization.
Previously mentioned were the 14 points of Deming’s TQM philosophy. However, prior to their successful application, the manager must possess what he called, the “System of Profound Knowledge”. The first of four parts included a manager having appreciation of the system and knowledge of the firm’s overall processes. Secondly, was the knowledge of variation that included the use of statistical analysis and causes of variation within quality. Thirdly was the theory of knowledge, which Deming explained as the limits of what can be known and also the concepts of learning. The last part of the system was knowledge regarding human nature. These components deviate from strictly organizational knowledge to general and psychological knowledge. Successful adoption of the 14 points relies on these four fundamental concepts. Authoritarian style management systems may believe anyone can take orders and fail to realize the importance of the psychological and behavioral aspects of their employees. In this case, the risk includes managers fully buying into a new system as well as the ability to see the benefits that continuous improvement may bring throughout the entire organization.
Implementation of Deming’s TQM philosophy is attributed to Japan’s industrial success following World War II. The underlying assumption in this approach is that management’s shift in focus to the continuous improvement of processes and quality will lower costs over time. By effect, the focus on quality can create a cycle that leads to higher productivity, increased market share, and long-term success.
After reaching a standard of quality, attention to the processes can lower costs. Reducing the variance between identical products may decrease costs by leaving less waste and less time spent reworking products. Continuous process improvement at all ranks will enhance productivity and firms should be operating at the cheapest and most efficient levels. Over time, producing high quality, lower priced products will lead to increased market share over firms not following this philosophy. Therefore, a firm may expect long-term success and growth by staying in business and creating jobs. The reward of Deming’s approach lies within its usage. Japanese firms that have adopted TQM philosophies such as Toyota and Honda have become models of quality and reliability.
As seen in the previous section, there are numerous pros and cons associated with Deming total quality management. In a manufacturing environment though, the Deming concept is essential.
In the long term, Deming can save a tremendous amount of money through better productivity and management, therefore; cutting costs while improving quality. Deming’s total quality management is especially important for a manufacturing firm because of its ability to streamline processes. That is, it can make more concise, and efficiently control, operations of a manufacturing firm.
The ultimate goal of a manufacturing firm is to make its customers satisfied. The way to do this is through quality products. Deming comes into play by enhancing the quality of products while also lowering costs, through phases of improvement, thus creating better efficiency.
I recommend all manufacturing firms utilize the Deming system for optimal performance and efficiency. Quality and cost are an integral part of a manufacturing environment and Deming’s 14 points knows just how to manage every aspect of those two factors. The quest for knowledge, especially in the manufacturing environment, is always present. Deming’s psychology “helps to understand people, interactions between people and circumstances, interactions between leaders and employees, and any system of management.” In a manufacturing environment, interaction between employees on the assembly line and upper management is vital. The communication and knowledge through Deming’s total quality management provide the necessary communication for a manufacturer to increase quality, coherence, and efficiency. Through communication, design processes can be better enhanced, including functionality, cost, and the time and resources to actually produce the product itself.
To close with a quote from the Dean of the University of Colorado, as heard by Deming in 1923, “There is no substitute for knowledge.”
- Participative management: the process of making decisions at lower levels in the organizational hierarchy allowing employees to become involved in making management contributions.
- Variation: measures whether an activity is under control, or if not, to what degree it is out of control.
- PDCA (plan –do-check-act): tool developed by Deming to improve quality and effective project management
- P (Plan): detailed plan identifying goals and delegating work while remembering to document the plans for analysis later on
- D (Do): enact the plan making sure to record any issues or problems along the way and the response
- C (Check): after completing the project, get the team together and go over the problems and solutions that were encountered. Take a broad look at the project and assess areas for improvement. Get the root cause of any problems that were experienced
- A (Act): Now knowing the causes of any of the problems, fix them. Be sure to standardize the techniques used so that future groups can avoid dealing with the same problems that arose.
- Transformation: a changing of the current style of management. It begins with changing the individual so that he/she perceives a new meaning to “his life, to events, to numbers, to interactions between people”. Once the individual has evolved, he/she will apply the new knowledge with every relationship in the business.
- Critical processes: processes that are repeatedly performed, help accomplish the mission and fulfill customer needs.
- Deming’s 85/15 rule: “85% of a worker’s effectiveness is determined by the system he works within, only 15% by his own skill”. Look at the inputs from suppliers and monitor outputs during the entire process.
- Constant learning: Use rigorous pre=employment screening, rigorous pre-work training, and retrain on the job to regularly gain knowledge. Management has to constantly be learning from everyone on the team AND from clients and competitors.