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13.04.23 IT229E – Kvalitetssikring 1

Quality

IT229E – Kvalitetssikring Handelshøgskolen i Bodø

IT229E – Kvalitetssikring 213.04.23

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


Philosophy2. 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


Philosophy3. Systematic approach to problem solving: the Deming, Shewart

cycle – Plan, Do, Check, Action

Plan

Do

Check

Action

Identify improvements and identify ways to achieve the improvements

Implement necessary actions to achieve improvement

Verify if the implemented changes results in improvements

What we do as a response to the observed effect


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


PhilosophyThe 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



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



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



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



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

expectation

7. 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

2. 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”

“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 cycle2. Statistical process control3. The fourteen principles for transformation4. The seven point action plan


MethodsStatistical 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


MethodsStatistical 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

Ant

all r

iktig

e

Nedre kontrollgrense

Sentrallinjen

Øvre kontrollgrense

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

2

4

6

8

10

12

14

OppgavenummerSpecial

Common


MethodsDeming’s fourteen Principles for transformation1. 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


MethodsDeming’s fourteen Principles for transformation

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


MethodsDeming’s fourteen Principles for transformation4. 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



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

6. Institute training on the job Improve competencies Not ineffective


MethodsDeming’s fourteen Principles for transformation7. 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


MethodsDeming’s fourteen Principles for transformation9. 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



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



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”


MethodsDeming’s fourteen Principles for transformation13. 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”


MethodsDeming’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


MethodsDeming’s seven-point action plan

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

5. 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


MethodsDeming’s seven-point action plan6. 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 process2. Changes in one area may have implications in another: Team culture

must be engendered between process owners3. Sharing and developing improvements across processes

7. 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


Successes and failures 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)

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


Successes and failures 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

5. 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


Successes and failures 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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