1. William Edwards Deming - InfoBarrel
Total Quality Management (TQM)
Executive Summary
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.
Introduction
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
2. 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.
3. 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
4. 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
5. 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.
Risks
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
6. may bring throughout the entire organization.
Rewards
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.
Recommendation
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."
Definitions
7. 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.
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