Deming’s Theory of Management, Increase Market Share,Increase Return On Investment, teamwork, training, top management commitment, decentralization,inspection,leadership,pdca,productivity,quality,quality assurance,quality control,quality management,the legend, organizational transformation, change, productivity

1. Dr. Zargari
The Legend
of
Edwards Deming
By:
Dr. Farhad Zargari
General Manager,
International Affairs Department,
Social Security Organization, I.R.Iran
drzargari@gmail.com

2. Dr. Zargari
Presented to ILO Course: A 9-
00025
Quality in Social Security
May 2003
Turin, Italy

3. Dr. Zargari

4. Dr. Zargari
Profile Slide 1 of 2
W.Edwards Demming was a world famous
`professor whose concepts and methods
dramatically altered the economy and working
methods of Japan. He was virtually unknown in
his native United States until his expertise in
quality management was noticed and applied by
the Ford Motor Corporation. Subsequently, he
helped many, many companies in various
industries to turn around their productivity and
competitiveness the effects of which are still felt in
the world and economy today.

5. Dr. Zargari
Profile Slide 2 of 2
 Introduced concept of Quality Circles in
Japan in 1950’s
 His concepts did not become implemented
in the US until the 70’s and 80’s
 He taught the use of statistical analysis to
make quality improvements
 Quality Circles were structured groups of
four to fifteen employees

6. Dr. Zargari
Deming’s Theory of Management
 Decentralization
 Participatory Management
 Managers should improve the system
 The common language for managers
and workers is elementary statistics,
which all workers learn.

7. Dr. Zargari
DEMING’S CHAIN REACTION
Improve
Quality
Costs
Decrease
Improve
Productivity
Decrease
Prices
Increase Market
Share
Stay in
Business
Provide
Jobs and
More Jobs
Increase
Return On
Investment

8. Dr. Zargari
Deming’s Quality Philosophy
 Developed a management system based on top-to-bottom
quality transformation.
 Keys to success:
 Teamwork
 Training
 Committed leadership of top management

9. Dr. Zargari
Demming’s formulation of his Fourteen
Points is seen by many as the
management equivalent of the “10
Commandments” . Like many quality
driven approaches, the fourteen points
take a holistic view of an organisation,
how it works, and its relationships with its
stakeholders.
Demming’s 14 Points for the
Transformation of Management

10. Dr. Zargari
Create constancy of purpose
towards improvement of quality
of products and services, with
the aim to become competitive,
to stay in business and to
provide jobs.
Point 1

11. Dr. Zargari
Notes on Point 1
For Demming, the idea of constancy revolves
around the customer. Success depends on
how well a company evaluates its processes,
products and markets in order to understand
future customer requirements. On a macro
level this entails long term commitment to
invest and adapt to changes in the market
place. On a micro level, it means fine tuning of
every function around changes in strategy that
may be needed to meet long term market
needs

12. Dr. Zargari
Adapt new philosophies.
Management must awake to new
challenges, learn their
responsibilities and take on
leadership for change. Adopt
philosophy of prevention.
Point 2

13. Dr. Zargari
In Demming’s view, the concept of
“quality” becomes the mission.
Quality means giving the customer
what he or she has a right to
expect. Business cannot afford to
tolerate mistakes, defects, poor
workmanship or anything else that
detracts from “quality”. Defects of
any type are costly, reliable
products reduce costs.
Notes on Point 2

14. Dr. Zargari
Cease reliance on mass
inspection to achieve quality.
Eliminate the need for mass
inspection by building quality
into the product in the first place.
Point 3

15. Dr. Zargari
Dependency on inspection at key points in
a process to ensure quality is too late,
expensive and ineffective. With this type
of policy, companies are paying workers
to make mistakes and then correct them.
“Quality comes not from inspection but
from improvement of the process”.
Notes on Point 3

16. Dr. Zargari
End the business of awarding
business on the basis of price
tags. Instead include quality and
minimize total cost. Move
towards a single supplier for any
one item, based on a relationship
of long term loyalty and trust.
Point 4

17. Dr. Zargari
Price has no meaning without a measure of the
level of quality being delivered. An example is the
purchase of a product after a tender process from
the lowest bidder without careful attention to
specification. This can only increase costs
elsewhere. When the concept of quality becomes
the central focus, the idea of buying from the
lowest bidder gets abandoned. Demming insisted
that the principle of close co-operation between
customer and supplier would inevitably lead to a
process of continuous improvement.
Notes on Point 4

18. Dr. Zargari
Improve constantly and forever
the system of production and
service to improve quality and
productivity, then thus
constantly decrease costs. You
should constantly improve
system and workers
Point 5

19. Dr. Zargari
Demming believed that each product
should be regarded as “one of a kind” and
that there is only one chance of success.
In his view the concept of “quality” should
be built in at the design stage and team
work in design is fundamental to the
process. Demming was an exponent of
the “Shewhart” cycle as an approach to
process analysis and improvement.
Notes on Point 5

20. Dr. Zargari
The “Shewhart” cycle can be summarized as
follows:
•Plan a change of what needs to be improved
•Carry out the change on a small scale
•Observe the result
•Study the results and decide what can be
learned
The underlying concept in simplistic terms is :
Plan-Do-Check-Act…...
Notes on Point 5

21. Dr. Zargari
The Deming Wheel
Identify problem
Develop plan for
improvement
Implement plan
on test basis
Is the plan working
Institutionalize
improvement
continue cycle
1. Plan
2. Do
3. Study / Check
4. Act

22. Dr. Zargari
Institute training on the job.
Point 6

23. Dr. Zargari
Too often workers learn their skills from other
workers who themselves have inadequate
training. It is useful to train as many workers as
possible to recognize when a system is drifting out
of control. Workers can do this more efficiently
than quality engineers. In addition, workers and
managers need to be trained to identify
improvement opportunities.
Notes on Point 6

24. Dr. Zargari
Institute leadership. The aim of
supervision should be to help
people and machines to do a
better job. So instill leadership
among supervisors.
Point 7

25. Dr. Zargari
Demings ideas of leadership revolve around the
concept of turning the role of managers and
supervisors from policeman to trainer. Since
lead management plays a key role in the
realization of quality, management reviews
should include discussion on problems and
potential solutions.
Lead managers should not judge workers on
their performance, instead they should look at
their own performance to see how that can
improve the effectiveness of others.
Notes on Point 7

26. Dr. Zargari
Drive out fear, eliminate finger
pointing, promote idea
expression so that everyone
may work effectively for the
good of the organisation.
Point 8

27. Dr. Zargari
Coercion or management through
fear is destructive. It impedes
production and interferes with
quality work. People cannot
perform at their best unless they
are secure and are not afraid to
express their opinions and fears.
Workers who fear their managers
or supervisors may well produce
the minimum required, but they will
not achieve “quality”.
Notes on Point 8

28. Dr. Zargari
Break down barriers between
departments. Develop team
approach and multidisciplinary
quality control circles. People in
research, design and production
must work as a team to foresee
problems of production and use
that may be encountered with
product or service.
Point 9

29. Dr. Zargari
Breaking down barriers between
staff is a matter of team work.
There is a lot of truth in the
parable that an “elephant is a
mouse designed by a committee,
that did not talk to the creator”.
Notes on Point 9

30. Dr. Zargari
Eliminate slogans, exhortations and
targets for the work force asking for
zero defects and new levels of
productivity. Such exhortations only
create antagonistic relationships
because the bulk of the causes of low
quality and production are a fault of the
system and are often beyond the power
of the work force.
Point 10

31. Dr. Zargari
At first glance such exhortations seem harmless.
According to Demming however, such
exhortations are aimed at the wrong people.
They advertize to workers that management is
unaware of the barriers to pride in workmanship,
thus creating antagonistic relationships.
Because most causes of low quality are
systematic, the power to effect improvement lies
beyond the work force. Workers can do little to
change the system, the burden of improvement
rests with management.
Notes on Point 10

32. Dr. Zargari
Eliminate quotas on the factory
floor, do not evaluate
individuals for problems, query
groups for solutions. Eliminate
management by numbers and
numerical goals.
Instead substitute leadership.
Point 11

33. Dr. Zargari
The problem with management by objective
(MBO) is that an organisation can achieve
almost any objective given appropriate
resources. The issue is that workers can
only function as well a circumstances permit
because they focus on the goal rather than
the process. Peer pressure will often mean
that good workers will do achieve the
average, where poorer workers will never
achieve the mean. The way to improve
production is to improve the system and find
out who is having problems.
Notes on Point 11

34. Dr. Zargari
Enhance worker pride. Remove
barriers that rob hourly workers
of their right to pride in
workmanship. Give them the
tools and training to do it right,
i.e. SPC etc. The role of
supervisors must be changed
from monitoring numbers to
creating “quality”.
Point 12

35. Dr. Zargari
Often managers do not understand the
issue of pride in workmanship because
they do not focus on the human
processes behind a product or service.
Demming believed that performance
rating systems were inherently unfair as
over time, providing the system was
refined and predictable, most workers will
perform at the same level, only a few
would deviate.
Notes on Point 12

36. Dr. Zargari
Institute a vigorous program of
education and self improvement.
Point 13

37. Dr. Zargari
Although this is similar to point six, the
thrust of this point is that educating and
improving the knowledge of the workforce
enables them to understand the impact of
future challenges and to come up with
their own solutions
Notes on Point 13

38. Dr. Zargari
Put everybody in the
organization to work to
accomplish “quality”. “Quality”
is the job of everybody.
EVERYONE WORKS TO
TRANSFORM THE COMPANY
Point 14

39. Dr. Zargari
According to Demming, the first and most
important step on the road to quality is achieved
when everyone understands the importance of
the fourteen points and becomes an active
participant in their implementation. Every job in
an organization is part of the production process,
and to achieve the necessary transformation
everyone must be committed to analyzing every
step, because only by understanding the role of
each job in the company’s strategy can the
production process be improved.
Notes on Point 14