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Quality

IT229E – Kvalitetssikring
Handelshøgskolen i Bodø

12.10.12 IT229E – Kvalitetssikring 1

Chapter 6
W. Edwards Deming
 Key learning points;
Deming’s definition of quality: a function of continuous improvement based on
reduction in variation around the desired output
Seven deadly Sins and Diseases:
 Lack of constancy
 Short term profit focus
 Performance appraisal
 Job-hopping
 Use of visible figures only
 Excessive medical costs
 Excessive liability costs

Three key beliefs: quantification, recognition of failure causes, systematic
approach, continuous improvement, constancy
Principal methods: fourteen-principles for transformation, the seven-point plan


Introduction
 Williams Edward s Deming, 1900 in US - 1993

 Considered to be the founding father of the quality movement

 Doctorate in physics from Yale
 Teached mathematics and statistics from 1930-1946

 Statistician, worked for the US government for many years

 Was closely involved in post-war development of quality in Japan
 Deming has been given a lot of the credit for transforming Japan into a
modern industrial state
 Rose to prominence in Japan


Introduction
 Heller (1989):
 Deming has a “passionate belief in man’s ability to improve on
the poor and the mediocre, and even on the good”

 Logothetis (1992):
 Sees Deming as advocating “widespread use of statistical
ideas, with management taking strong initiative in”

 Bank (1992)
 Deming helped Japanese quality movement “to cut through the
academic theory, to present the ideas in a simple way which
could be meaningful right down to production worker levels”


Philosophy
1. Initial approach: based on statistical methods
 Use of quantitative method
 Management focus on causes of variability in manufacturing
processes
 Identify special and common causes of quality problems
 Special causes: relating to operators or machines
 Common causes: Arise from the operation of the system itself;
responsibility of the management.
 Belief: there are common and special causes of quality
problems


Philosophy
2. Use of Statistical Process Control (SPC) to identify special and
common causes
 Brings the production process under control
 Aim: remove quality problems relating to special causes of failure
 Remaining quality problems are common causes: inherent in the
design of the production process
 Eradication of special causes enables a shift in focus to common
causes to improve quality further
 Belief: a quantitative approach to identifying and solving problems


Philosophy
 Comments on use of SPC
 The statistically approach brings its own problems Bendell (1989):
 Lack of technical standards, limitations of data
 Human difficulties by employee resistance and management lack of
understanding as to their roles in quality improvement
 Deming’s approach reflects the machine view
 For most people the subject is tenuous and we often find it hard
to understand what the results achieved really mean
 The value of Deming’s work could be obscured by our ability to
interpret it


Philosophy
3. Systematic approach to problem solving: the Deming, Shewart
cycle – Plan, Do, Check, Action

Identify improvements and identify
Plan ways to achieve the improvements

What we do as a response to
the observed effect
Action Implement necessary actions to
Do achieve improvement

Verify if the implemented changes Check
results in improvements


Philosophy
3. Systematic approach to problem solving: the Deming,
Shewart cycle – Plan, Do, Check, Action
 Frequently used in other methodologies (e.g. ISO 9000:2001,
Oakland)
 Continuous cycle – Do it all over again
 Belief 1: systematic, methodical approach
 Belief 2: continuous quality improvement action


Philosophy
The seven deadly sins
 Fundamental beliefs about bad management
 Are the cause to the poor condition of many organizations today
 Must be eliminated

1. Sin 1: “Lack of constancy”
 Lack of constant commitment from senior management
 Management “run on the quarterly dividend”
 Deming urges an absolute and constant commitment on senior
management to quality, productivity and innovation; i.e.:
 Drive towards better quality of product in order to drive down costs, protect
investment and employment, enlarge markets and generate more jobs


Philosophy
2. Sin 2: “Short-term profit focus”
 Prevents continuous improvement and constancy
 Need to satisfy owners, Reduction of costs
 Deming points out that the expectations of the owners must go beyond
the immediate return on capital to consider the long-term future
 A sin that is difficult to eliminate

3. Sin 3: “Performance appraisal” (Prising av prestasjoner)
 Ranking of employees
 Subjective, may leave people bitter, desolated, feeling inferior
 May lead to rivalry and isolation, undermines team affiliation
 Demolish teamwork and leads back to focus on short term performance
 Deming warns against badly designed appraisal systems


Philosophy
4. Sin 4: “Job-hopping – regular movement of management
between jobs”
 Leads to instability
 Destroys team work and commitment
 Decisions are taken in ignorance of the circumstances around them
 Reinforce the short term orientation
 Deming points out the need for commitment of management to the
long-term future


Philosophy
5. Sin 5: “The use of visible figures only”
 Organizations don’t recognize and evaluate intangible aspect of the
organization.
 Additional sales generated through satisfied customers
 Negative impacts of performance appraisal
 Barriers achieving quality….
 Deming considers that managers that believes that everything can
be measured are deluding themselves
 Managers should know that they will be able to quantify only “a trivial
part of the gain”
 Managers that base their leadership on figures only will eventually owe
neither figures nor company….
How does this
conflict with his
espousal of
statistical methods


Philosophy
6. Sin 6: Excessive medical cost
 The cost of insurance is driven by claims experience and actuarial
expectation

6. Sin 7: Excessive costs of liability (Erstatningskrav)
 There is an increasingly litigious public
 The costs must be borne by the organization
 May relate to the organization:
 What types of liability costs? How are the agreements? Delayed deliveries?...
 May relate to broader societary changes
 Towards individual rather than collective values
 “Whenever things go wrong, there must be some to blame”
 This may not be within the control of the management and manufacturers


Philosophy
 Summary of Deming’s philosophy:
 Quantitative, statistically valid, control systems
 Clear definitions of those aspects under the direct control of staff –
that is the “special causes” – and those which are the responsibility
of management – “the common causes” (as high as 94%)
 A systematic, methodical approach
 Continuous improvement
 Constancy and determination

 Quality should be designed into both product and process.
(Deming and Crosby)


Assumptions
1. Management processes and attitudes must be
“transformed” in order for sustained improvement to be
achieved
 The management is seen to be responsible and capable of
undertaking the proposed transformation
 Deming does not suggest , in organization design terms, how this
should be achieved

1. Statistical methods will provide quantitative evidence to
support changes
 At the same time he recognizes that some aspects cannot be
easily measured


Assumptions
3. Continuous improvement is possible and desirable
 If the needs of the customer is fully met and understood,
where is the benefit in further improvement?
 Handy (1990) characterizes the contemporary world by
“discontinuous change”
 Long-term view and continuous improvement may not be enough
 Maybe organizations must be built for sudden, catastrophic,
change
 E.g.: the dotcom business; the inevitable collapse of the weak
brought down many of the strong


Assumptions
3. The service sector’s prime job is enabling the
manufacturing to do its job
“A better plan for freight carriers would be to improve service and thus
decrease costs. These cost savings, passed on to manufacturers and to
other service industries, would help American industry to improve market
for American products and would in time bring new business to carriers of
freight”

 Deming sees an altruistic effort which contrasts sharply with his
accusations of short-termism


Assumptions
3. The service sector’s prime job cont…
 The implications of his assumptions about the role of
services must be considered
 Few local communities thrive when their manufacturing base
is lost
 E.g. shipbuilding and coal-mining communities in UK suffer from
major economic difficulties, social fragmentation and
unemployment  it’s discovered that many service sectors have
been dependent upon local manufacturers
 Is there any future for nations if their manufacturing base is
lost?


Methods

 Deming has four principal methods:
1. The PDCA cycle
2. Statistical process control
3. The fourteen principles for transformation
4. The seven point action plan


Methods
Statistical Process Control (SPC)
 SPC is a quantitative approach based on measurement of
process performance
 A process is under control – stable - when its random variations
fall within upper and lower limits
 A control chart is used to record the values
 Statistical analysis reveal the mean value
 Normal variation from mean value for a process is any value
within ± 3 standard deviations of the mean


Methods
Statistical Process Control (SPC)
 Events falling outside normal variation are considered “special”
and should lead to diagnosis and treatment

 Events falling within the norms are considered to have
“common” causes
 They are a product of the organization of the system and require
treatment at the system level  responsibility of management

 Deming:
 94% belong to the system, 6% special


Example of a Control diagram
 Undersøkelse av brukbarheten
 Diagnose: nødvendig med endringer
 Årsak til problemene finnes kun ved å se nærmere på prosessen

14
Øvre kontrollgrense
Antall riktige

12
10
8
Sentrallinjen Common
6
4
Nedre kontrollgrense
2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Special
Oppgavenummer


Methods
Deming’s fourteen Principles for transformation
1. Create constancy of purpose to improve product and service
 Create a “team” type of environment, all are working to a common
goal
 Requires management to commit themselves to achieving ever-
improving quality as a primary objective of the organization
 Long-term commitment
 Stable jobs and no focus on profit on short-term

2. Adopt a new philosophy for the new economic age, with
management learning what their responsibilities are and
assuming leadership for change
 Acceptance by management that the responsibility for developing
and achieving the changes is theirs
 Recognition that the workers are not to blame


Methods

3. Cease dependence on mass inspection to achieve quality, by
building quality into the product

 Prevent defects: do things right the first time
 Implies a dramatic change in management, organization structure
and information management
 Abandonment of mass inspection not supported by changes may
be disastrous
 E.g.: the introduction of multidisciplinary product development
teams, John Deere Tractors


Methods
4. End the awarding of business in price; award business on total
cost and move towards single suppliers
 The invoice unit price of a part is only a fraction of its total
potential cost
 Total cost may include:
 Unit cost, quality (failure, reject), inspection costs, ease of use in
manufacturing environment
 Ongoing running costs may be far greater than the initial cost
 Benefits can be obtained by bearing a higher initial cost in order to
generate long-term savings
 Advantages of a single supplier
 Negotiating improvements, long-term relationships, secure financial
platform for supplier
 Disadvantages of a single supplier
 Vulnerable to failure on the part of the supplier, financially or in quality


Methods

5. Aim for continuous improvement of the system of production
and service to improve productivity and quality and to
decrease cost
 Aim for continuous improvement
 Focus on productivity, quality and decreasing costs
 Objectives can be made more quantifiable

5. Institute training on the job
 Improve competencies
 Not ineffective


Methods
7. Institute leadership with the aim of supervising people to help
them to do a better job
 Move towards a collaborative management style
 Give advice, not blame
 Motivate and support employees

8. Drive out fear so that everyone can work effectively together
for the organization
 Fear is the greatest obstacle to achieve the principles
 Ineffective
 Provide communication


Methods
9. Break down barriers between departments. Encourage research,
design, sales and production to work together to foresee
difficulties in production and use
 Multidisciplinary teams for product and service development
 Co-operation between departments
 Common objectives

10. Eliminate slogans, exhortations and numerical targets for the
workforce
 Irritates staff more than encourages
 Argument of Deming:
 If “special causes” of failure related to machines and workers have been
removed through use of SPC, then all other causes of failure relate to the
system itself. These are the responsibility of management


Methods

11. Eliminate quotas or work standards and management by
objectives or numerical goals;
 Leadership should be substituted instead
 Seems to be a contradiction: improvement targets are an inherent
part of measuring achievement and SPC provides one form of
measuring achievement

 Deming’s point: if the system is stable, then performance cannot
be improved by the setting of targets, only by changes to the
system

 Quotas and targets are meaningless unless accompanied by an
action plan to improve the process


Methods

12. Remove barriers that rob people of their right to pride in their
work
 Annual appraisal focuses the attention of management on matters
covered in the appraisal system
 Management will strive to achieve these regardless of the impact on
quality or productivity

 Workers are constrained by
 Uncertainty of employment, lack of definition of acceptable workmanship,
poor quality materials, tool and machines and ineffective management
 If workers constraints are removed, quality products will follow
 Deming:
 “Give the workforce a chance to work with pride, and the 3 % that
apparently don’t care will erode itself by peer pressure”


Methods
13. Institute a vigorous education and self-improvement program
 People must continuously improve, if the organization is to
improve
 Staff is the organizations most important resource
 Knowledge is the competitive advantage

14. Put everyone in the company to work to accomplish the
transformation
 A total approach must be taken
 Requires a strong and cohesive culture
 Commitment from top to bottom
 Management must be consistent with their words: “walk the talk”


Methods
Deming’s seven-point action plan
 An action plan to implement the principles
 What to do, not how to do it

1. Management must agree on the meaning of the quality
program, its implications and the direction to take

2. Top management must accept and adopt the new philosophy

3. Top management must communicate the plan and the
necessity for it to the people in the organization


Methods

4. Every activity must be recognized as a step in a process and
the customers of that process identified; the customers are
responsible for the next stage of the process
 Process based work flow, the processes are divided into stages
 At every stage there are customers that must be identified and
satisfied

4. Each stage must adopt the Deming-Shewart cycle – PDCA –
as the basis of quality improvement
 Continuous improvement of every stage through the PDCA cycle
 Acceptance of responsibility of the process and authority to
develop and implement changes


Methods
6. Team working must be created and encouraged to improve
inputs and outputs; everyone must be enabled to contribute to
this process
 Participation in team work can be seen in several levels:
1. A team culture within each process
2. Changes in one area may have implications in another: Team culture
must be engendered between process owners
3. Sharing and developing improvements across processes

6. An organization for quality must be constructed with the support
of knowledgeable statisticians
 Build an organization which reflects and nurtures the achievement
of quality
 Deming suggests the use of statisticians
 Multidiscipline team shows the collaborate nature of achieving quality


Successes and failures
 Overall Deming can be said to have been
successful

 Substantial success in Japanese industry

 After Japanese success he was able to turn his
attention to America
 Here he met “strong workforce resistance”: Deming had
to revise his methods
 Emphasis from quantitative to qualitative approach
 Coded the “Seven Deadly Sins”


 Flood (1993) acknowledges the principal
strengths of Deming:
1. The systemic logic, particularly the idea of internal
customer-supplier relationships
2. Management before technology
3. Emphasis on management leadership
4. The sound statistical approach
5. Awareness of different socio-cultural approach


 Comments on Flood’s principal strengths:
1. The systemic and logical approach is seen through the
“PDCA” cycle
 Both personal and organizational improvement

2. Prioritization of management before technology
represents a reversal of attitudes of many managers
 Many look for external rather than internal factors as
responsible for failures (94% belongs to managers)

2. Recognition of the importance of good leadership and
motivation can be seen to reflect human relations
theory


 Comments on Flood’s principal strengths:
4. A strong quantitative base is fundamental to
achievement of quality
 “Do better”  “How much?”/”When”
 We must know when success is achieved
 Target orientation is motivational

4. Recognition of different cultural contexts is a vital
strength
 Essential in achieving success


 Flood (1993) weaknesses:
1. Lack of well-defined methodology
2. The work is not adequately grounded in human
relations theory
3. The approach will not help in an organization with
a biased power structure


 Comments on Flood’s weaknesses:
1. Deming suggests what to do without indicating how
 May be empowering
 Encourages experimentation and debate within each context

3. Deming is criticized for saying nothing about intervention in
political and coercive situations
 The second principle and the first three point in the action plan call
on management to accept their responsibility for quality and
productivity and to embrace the new philosophy
 Deming’s approach rests on the attitude of the management


Critical review
 The foundation of Deming’s approach is seen in his statistical
background and his training in the science of physics
 Hard sciences, but make a major contribution to the field of quality

 The principles and practice of SPC have demonstrated
considerable value to organizations
 Have also given value to workers: rapid and personal feedback

 Deming’s work in relation to softer issues is considered narrow
and underdeveloped
 The PDCA cycle is a directive to management and workers that
continuous improvement is the purpose of the quality activity


Critical review
 Deming references the service sector in his work
 But places much emphasis on quantitative aspects

 Managers measure things that are easy to measure
 Things that are difficult to measure, but of greater
importance, are not measured
 In a world of telecommunication devices, these aspects will
have increasingly importance


Critical review

 Deming has made a substantial contribution to
quality management, but he should have
 Provided a clearer method
 More explicit and developed recognition of human
aspects
 A precise focus on what constitutes quality of service


Oppgaver
1. Hvilke 4 prinsipielle metoder har Deming?

2. Forklar prinsippene og målet ved Deming-Shewart hjulet (PDCA cycle).

3. Hva er formålet med Demings sju punkts aksjons plan.

4. Deming mener at 94% av kvalitetsproblemene er ansvar som ligger hos ledelse.
Diskuter denne påstanden.

5. Diskuter prinsipp 3, ”Cease the dependence on mass inspection to achieve
quality, by building quality into the product”. Hva menes?

6. En av de syv dødelige synder (sykdommer) er ”Kortsiktig fokus på profitt”. Hva
mener Deming med dette? Ser vi det i bedrifter i Norge i dag? Har du eksempler?

7. På hvilken måte er Demings metode både kvantitativ og kvalitativ?


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