Edwards Deming: Out of the Crisis. A new paradigm for managing people, systems and processes

Source: Preface to E. Deming's book "Out of the Crisis", Edwards Deming

“Management miscalculations in planning and incorrect foresight of problems led to loss of work time for workers and equipment, materials, and all this increased the costs of the manufacturer, and therefore the price that the buyer had to pay. But the consumer does not like to cover these losses from his own pocket. The inevitable result is market loss and unemployment Management performance should be measured not by the amount of dividends in the current quarter, but by its ability to ensure business sustainability and investment protection, guarantee future dividends, and save jobs through product and service improvement.

The main cause of the disease of the American economy and as a result high level unemployment in the inability of top management to govern.

Bankruptcy is usually cited as a reason high costs to launching a new business project, exorbitant costs, depreciation of excess inventory, competition, anything but the actual cause - simple and clear - of poor management. What about those who manage the company? It is absolutely clear that we need to work in a new way. But where can management learn about the required changes?

The truth is that managers will not be able to learn what they need to do to improve the quality and productivity, competitiveness of the company, relying only on experience.

The answer: “Let everyone do their job as best as possible” is not good.

First of all, people must know what to do. Deep transformations are needed. The first step towards them is to learn how to change, that is, learn and use the 14 points and be cured of diseases.

Any manager who wants to change requires a long-term commitment to new knowledge and a new philosophy. Timid and cowardly, as well as those who hope for a quick result, are doomed to disappointment.

Solving problems, big and small, will not be able to stop the fall of the American economy, as, indeed, computerization, as well as the use of all kinds of devices and robotics. The benefits of large-scale introduction of new equipment are also a myth. The general training of workers in industrial enterprises in statistical methods is also not an option, as well as mass campaigns to plant quality circles. All this can only prolong the life of the patient, but not stop the disease. Only a transformation of American management style and the relationship between government and manufacturers can stop the decline and give American industry a chance to become a world leader again.

The well-being of the company directly depends on the successful work of the management. American industry can no longer afford to tolerate bouncing managers. The senior manager must proclaim the policy for the future: to keep the business, to provide employees with work and create new jobs. The manager must understand the methods of developing products and services, arranging the supply of materials, issues of production, process control and remove obstacles that deprive the worker of his natural right to be proud of his craftsmanship.

Leaders of all levels need elementary scientific knowledge in particular, they must be aware of the nature of variation and operational definitions. Numerous examples in the book show how errors in distinguishing between two kinds of variations due to special and general causes and neglect of operational definitions lead to losses and demoralization.

Way out of the crisis. A new paradigm for managing people, systems and processes Edwards Deming

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Title: Out of the Crisis. A new paradigm for managing people, systems and processes

About the book “Out of the Crisis. A New Paradigm for Managing People, Systems and Processes Edwards Deming

Today, not many people dare to open their own business, as this is not only a long and complicated process, but also a certain risk. Plus, sometimes the traditional methods of building a business just don't work. As a result, it turns out that you need to constantly invest a lot of money, but at the same time, income remains the same or even falls. This leads to only one result - the company closes without having time to develop.

Edwards Deming's book Out of the Crisis. A new paradigm for managing people, systems and processes” offers completely new methods of business management. The author shares his life experience and offers completely new methods that will help your company not only stay afloat, but also grow rapidly.

Edwards Deming is a famous American scientist and management consultant. He visited Japan in 1946 and gave lectures on management. The top executives of Japanese companies not only agreed with Deming's opinion, but also began to massively train managers on the proposed theories. This led to the fact that the quality of manufactured products has improved significantly, while costs have not increased. This process has been called the "Japanese economic miracle".

Edwards Deming in his book "Out of the Crisis. A New Paradigm for Managing People, Systems and Processes” shows that the quality of manufactured products can grow rapidly if enough time and attention is given to it. If more attention is paid to the speed of production of products, then the quality will begin to fall and, consequently, the interest of consumers will also fall.

In addition, Edwards Deming emphasizes that the entire management system of a company should be integral, and not consist of certain pieces. That is, every employee, specialist, manager should be interested in what they do. They should all have one goal, which will lead to a seamless production that will be worked on by a team, and not by individuals. This will also guarantee High Quality produced goods.

The book contains a wealth of advice from Edwards Deming. He also offers his 14 key principles. For example, many companies seek to purchase materials for their production at the most low prices. That is, for them the price is in the first place. The author urges to pay more attention to the quality of the purchased goods, requiring suppliers to confirm it, and completely forget about cheap purchases. Also, the author calls for constantly improving the process of doing business by looking for new problems on different stages: from production to sale.

Edwards Deming also recommends company managers to encourage their employees for training. After all, each company needs specialists, and not those who will monotonously perform work. If you motivate colleagues to study, study new material, introduce new systems, you will see how effective and useful this method is for the development of your business.

In the book "Out of the Crisis. A New Paradigm for Managing People, Systems and Processes” there are many other tips and theories from Edwards Deming. This person not only knows how to succeed, but also helps each of his readers to do it. The book is intended for a very wide audience of professionals who want to make their work both loved and effective.

On our site about books lifeinbooks.net you can download for free without registration or read online the book “Out of the Crisis. A New Paradigm for Managing People, Systems and Processes” by Edwards Deming in epub, fb2, txt, rtf, pdf formats for iPad, iPhone, Android and Kindle. The book will give you a lot of pleasant moments and a real pleasure to read. Buy full version you can have our partner. Also, here you will find latest news from the literary world, learn the biography of your favorite authors. For beginner writers there is a separate section with useful tips and recommendations, interesting articles, thanks to which you yourself can try your hand at writing.

Today I want to introduce one of my favorite books: Edwards Deming. Way out of the crisis: A new paradigm for managing people, systems and processes. – M.: Alpina Publisher, 2011. – 424 p. The book, by the way, was included in (according to Jack Covert and Todd Sattersten).

What is so great about this book? In my opinion, it provides the most powerful theoretical and partly practical groundwork for practicing managers in the question, what is the management of our organizations, on what fundamental principles should it be based. Many spears have been broken around Deming's fourteen principles of management, which, again, in my opinion, should not be approached dogmatically. If you defend these principles "with foam at the mouth", then how will Deming's followers be better than any other dogmatists!? Time passes, and dogmas (principles) cannot remain unshakable. At the same time, the next two pillars of Deming's teaching - operational definitions and understanding of variability - will survive the centuries!

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Foreword by science editors

In application to business and social tasks operational definitions of key concepts help prevent huge economic losses and help reduce risks. Operational definitions are of great importance for achieving mutual understanding and joint cognitive activity of people. … Trying to understand the reasons why managers all over the world tend to reproduce the stereotypes of a primitively simplified (“reflexive”), confrontational style of management, Deming came to the conclusion that the root of the problem is the lack of the required knowledge about the patterns of formation of the effectiveness of socio-economic systems.

Blindly following a certain principle, copying successful way action potentially poses a threat. Successful management in such systems is guaranteed only if in their actions the subjects of management are guided by the continuously developing "model of the world". It is possible to present such a model of the world for management in different forms. Historically, the famous 14 points of Deming - the Program of Action for American Manufacturers - became the first such form. In subsequent years, Dr. Deming created a new, even more general version of the organizational "model of the world" - a system of in-depth knowledge - scientific concepts and principles that are conditionally grouped into four main areas: understanding the system properties of organizations, the doctrine of optimal management methods in conditions of variability (variability a) processes, objects and environment; elements of the theory of knowledge; bases of knowledge about individual and group psychology.

Bankruptcies are usually cited as high costs of starting a new business project, exorbitant costs, devaluation of excess inventory, competition - anything but the actual reason - simple and clear - bad management.

Chapter 1.Chain reaction: quality, productivity, cost reduction, market penetration

The purpose of this chapter is to point out the presence of a stable system of problems in an industrial enterprise and to explain why, when the system is stable, management is responsible for improving quality. …the common belief is that quality and quantity are incompatible - you can't have both at the same time. Those who claim this do not know what quality is and how to achieve it.

A clear and compelling answer to the question, “Why does productivity increase when quality increases?” (Fig. 1):

• Less rework.
• Not many losses.

Rice. 1. Better quality leads to higher productivity

Quality for a production worker is, first of all, an opportunity to get satisfaction from work, to be proud of one's skill. By improving quality, we turn wasted man-hours and underutilized machine time into superior products and superior services.

What happens when we improve the quality? An illustration of the increase in productivity against the backdrop of improved quality:

What could management do? The manager and two foremen worked out a single criterion and got to work. After seven weeks of trial and error, they developed operational definitions, prepared samples of acceptable and unacceptable products, and put them on public display. This is an example of the productivity gains associated with changing the system itself, namely the refinement of the definitions developed by management in order to make the process easier to do rather than complicate it (Fig. 2). The next step is to get rid of 5% of defects.

Rice. 2. Reducing the defect rate after the introduction of an operational definition of what work is considered acceptable

If I were a banker, I would not lend money for new equipment until the company applying for a loan provides statistical evidence that it is fully exploiting the potential of existing equipment ...

Chapter 2

Guiding questions and comments from Lloyd Nelson (Director of Statistical Methods at Nashua Corporation):

1. The central problem of management is the lack of understanding of the meaning of variability and the inability to extract the information that it contains.
2. If you can improve productivity or sales or quality or whatever by (say) 5% in next year without a logical improvement plan, why didn't you do it last year?
3. Most important factors, needed to manage any organization, as a rule, are unknown and quantitatively indeterminate.
4. In a state of statistical control, the response to the appearance of any defect will be ineffective and will create new difficulties. What needs to be done is to improve the process by reducing variability or changing the mean, or doing both. Studying the sources of product properties from the very beginning of the production process provides a powerful lever for improvement.

“…and if you can’t come yourself, then don’t send anyone”… These are the words from a letter written by William Conway (President and Chief executive director Nashua Corporation) to one of the vice presidents in response to a request to send him an invitation to visit Nashua Corporation. With this phrase, Mr. Conway said that if this person does not have time to do his job, then he cannot do anything for him.

14 points for management

1. Achieve a constancy of purpose - continuous improvement of products and services to achieve competitiveness, save business and create jobs.

2. Adopt a new philosophy. We are in a new economic era. Western management must accept the challenge and realize its responsibility by becoming a leader of change.

3. End dependency on quality control. Eliminate the need for mass inspections by building quality into products first. Quality is not created by testing, but by improving the manufacturing process.

4. End the practice of judging and selecting suppliers based on price alone. Instead, minimize overall costs. Strive to find a single supplier for each type of supply based on long-term relationship loyalty and trust.

5. Constantly and continuously improve the production and service system to improve quality and productivity, and thus continuously reduce costs. Extinguishing the fire does not mean improving the process. Identifying and eliminating special causes of variation, defined by points outside the control chart, is no improvement either. This is simply returning the process to where it should have been from the very beginning.

6. Enter on-the-job training.

7. Establish leadership. The job of management is not oversight, but leadership. The goal of managers should be to help people, improve machines and fixtures so that they work better. It is necessary to reconsider the methods of management in relation to both managers and production workers.

8. Cast out fear so everyone can work more effectively for the company.

9. Break down barriers between departments. Research, design, sales and manufacturing departments must work as a team to anticipate potential problems in the manufacture and operation of products and services.

10. Reject slogans, slogans and goal setting for workers demanding "zero defects" and going to new level performance. Such appeals only generate hostility, since in most cases low quality and productivity are at the mercy of the system and, therefore, are beyond the control of the workers. Management, of course, wants to see higher productivity and fewer defective products. Their method is to call on the workers to work better. The poster is addressed to the wrong people.

11. a) Eliminate quantitative norms and tasks for workers in the shop. Replace them with leadership.

6) Eliminate management by goals. Stop managing by numbers and quantitative results. Replace it with leadership. To manage, you need to be a leader. To be such, one must understand the work for which you and your people are responsible. Who is the consumer (next step) and how can we best serve them? The beginning manager must learn to become a leader and manage the sources of improvement. He has to learn from his employees about what they do, as well as a lot of new things. It's much easier, however, to cut corners, save on required knowledge, and focus on the end of the process to manage output with quality reports, failure rates, defective rates, inventory, sales, and people. However, focusing on the output is not an effective approach to improving a process or activity.

12. a) Break down the barriers that deprive regular workers of the right to take pride in their workmanship. Absenteeism mostly lies on the conscience of management. When people feel they are needed at work, they go there. Masters should be responsible not for numerical indicators, but for quality.

6) Break down the barriers that deprive managers and engineers of their pride in their craft. This means, among other things, the abandonment of annual evaluations or ratings and management by objectives.

13. Establish a broad program of learning and self-improvement.

14. Get everyone in the company to work together on a fundamental change. Transformation is a job for everyone (Figure 3).

Rice. 3. Shewhart cycle (aka Deming cycle, PDCA cycle: plan, do, check, act)

Chapter 3

A. List of deadly diseases

1. Lack of consistency of purpose in designing products and services that will keep the company in business and provide jobs.
2. Short-term focus: short-term thinking (which is completely inconsistent with the persistence of the goal of maintaining a business), fueled by the fear of a hostile takeover and pressure from bankers and stockholders.
3. Certification and ranking of personnel. Counting is the path to degradation. One of the main outcomes of performance evaluation is support for short-term thinking and short-term performance. A person must have something that he can submit for evaluation. His boss needs numbers. It's easy to count. And calculations free management from the need to develop meaningful indicators.
4. Jumping managers from place to place.
5. Management based only on known quantitative criteria.

Actually the most important numbers needed by management, are unknown and quantifiable, but successful management must nevertheless keep them in mind. For example:

1. The effect of multiplying sales if your customer is delighted, and the reverse effect of a disappointed customer.

2. Improved quality and productivity at all stages of the process with successful quality improvement at any previous stage.

3. Increasing the quality and productivity of the company, in which management clearly shows that its policy is to keep the company, adapting to the market, and that such a policy is unshakable towards everyone.

4. Improvement in quality and productivity as a result of continuous process improvement, as well as due to the rejection of production standards and better education or better leadership.

5. Improved quality and productivity due to a team consisting of representatives of the selected supplier, purchasing department, designers, sales department, as well as a customer company that has developed a new component or redesigned an existing part.

6. Improving quality and productivity due to the teamwork of technologists, manufacturers, salespeople and representatives of the consumer company.

7. Losses due to annual appraisals.

8. Losses due to barriers that prevent employees from being proud of their skills.

9. Where in a trucking company can you find numbers that indicate losses from running empty or from improper maintenance?

B. Obstacles

• Hope for instant pudding
• The assumption that by solving problems, introducing automation, fixtures and new equipment, we will transform the industry.
• Looking for examples... Copying is risky.
• "Our problems are different"
• Outdated programs in educational institutions
• Insufficient training in statistical methods in industry.
• Use of military standard and other tables for sampling acceptance control.
• "Our quality control department solves all quality problems."
• "We have implemented quality management." Anyone who talks about “implementing quality control” unfortunately knows little about what it is. Quality and productivity improvement, to be effective in any company, must take the form of year after year learning led by top management.
• "Dehumanized" computer.
• Belief that you just need to get into the admission. The programmer has a similar problem. Upon completion of the work, he learns that he wrote an excellent program that meets the TR, but the TR itself was not perfect. If only he knew the purpose of this program, he might have made it fit for that purpose even with imperfect TRs.
• The fallacy of the "zero defects" theory.
• "Anyone who comes to try to help us must have an excellent understanding of our business."

Quality circles can never replace the unwavering responsibility of management to redefine its own role and reshape the corporate culture.

Chapter 4. When? How long?

Catch up? People wonder how long it will take America to catch up with Japan. This is a relevant but misunderstood question, born of misunderstanding. Will the Japanese sit back and wait for someone to catch up with them? How can you overtake someone who is constantly picking up speed? Now we know that it is not enough just to defend against competitors. Those who hope to make do with "building bastions" have already lost.

Chapter 5. Questions to Help Managers

This chapter contains questions that may give management some basis for understanding its responsibilities.

Chapter 6. Quality and the consumer

Quality should be measured as the result of the interaction of three elements (Fig. 4)

Rice. 4. Three corners of quality

Chapter 7 Quality and Productivity in Services

Everything we have learned about the 14 points and the diseases of management applies to both production organizations as well as to service companies. In this chapter, we will focus on the service industry. The Ishikawa Chart (Figure 5) helps us find our goal to stick to day by day in a typical service company.

Rice. 5. Components of customer service costs electric company(Ishikawa's "fish skeleton" scheme)

Chapter 8 Some New Principles for Teaching and Leadership

The goal of leadership. Leadership should be aimed at increasing the productivity of people and machines, improving quality, increasing output, and at the same time making people feel proud of their work. Formulated in denial, the goal of leadership should not be to discover and fix the person's faults. Eliminating the causes of errors is what will help people do better work with less effort. The leader is also responsible for improving the system, i.e. it creates opportunities for everyone to continuously improve their performance and enjoy their work more and more.

Obviously, it is extremely important to train new people to do their job well as soon as they start it. As the learning curve flattens out, the control chart will show if and when the learner has reached a state of statistical control. Once he has reached this state, further training by the same method will not give anything. If the work of a person is far from the state of statistical controllability, continued training can still bring an effect.

Should you tell the worker about the mistake? Consider:

1. Has the operational state of statistical control been reached? or
2. The worker has not reached the state of statistical control.

First, let's talk about the first worker. In a state of statistical control, the answer to the question must be negative. Unless his chart shows the presence of a particular cause of variation, in which case he should have already noticed it on his control chart and eliminated it. The underlying principle suggested here is that no one should be blamed or punished for outcomes that they cannot control. Violation of this principle can only lead to disappointment and dissatisfaction with the work and, as a result, to a decrease in the level of production.

An example of erroneous control. Erroneous control leads to three types of problems: 1) frustration of production workers; 2) misinterpretation points on the control chart; 3) defective products are delivered to the consumer.

The method of dealing with control errors is the operational determination of what is acceptable and what is not. The operational definition includes the test method, example, and criteria by which a decision is made as to whether a piece of work can be classified as defective or acceptable. An operational definition is a definition whose meaning can be communicated to others; it is a language through which people can understand each other.

Chapter 9. Operational Definitions, Compliance, Efficiency

According to many industrialists, nothing is more important to business than operational definitions. Everything meaningful begins in the human brain with concepts (thoughts, ideas, images). The only way to convey the meaning of any word, prescription, instruction, specification, indicator, property, regulation, law, system, decree is through a description of what happens when a certain operation or test is performed.

An operational definition allows a concept to be given a definite form that is clear to everyone. The meaning of such adjectives as “good”, “reliable”, “homogeneous”, “round”, “tired”, “safe”, “unsafe”, “unemployed” cannot be conveyed until they are expressed through operational terms of samples, tests and criteria. The concept of an ordinary definition is inexpressible: it cannot be communicated to anyone. An operational definition is one with which man of sense may agree.

Operational definitions include:

1. Specific test method for a sample of a material or subassembly
2. Criterion (or criteria) for making a decision.
3. Decision: yes or no, the object or material meets or fails the criterion(s).

Practice is more precise than pure science; more accurate than learning. According to Shewhart, the standards of knowledge and skill required in manufacturing and service industries are more stringent than those of pure science. Without operational definitions, problem research will be costly and inefficient, almost certainly leading to endless debate and controversy.

Chapter 10. Standards and regulations of state bodies

I oppose the proposal to transfer the standardization function to the government. It's not a flexible system. It does not allow one of the manufacturers to deviate from the standard in order to create a specialized and useful business. Standards created under such conditions usually take the form of containment, control, and limitation procedures. They narrow the choice for consumers.

Chapter 11. General and specific causes of variation and opportunities for improvement. stable system.

The main problem of management and leadership, according to my colleague Lloyd Nelson, is the inability to interpret the information contained in the variations. …the actions required to reduce the special causes of variation are fundamentally different from the actions required to reduce the number of variations and errors caused by the system itself. Managers must understand why as quality improves, costs decrease. It is very important for industry and science to understand the difference between a stable and unstable system and how to correctly present data in order to make a reasonable conclusion about whether the system is stable.

The control chart indicates the existence of causes of variation that lie outside the system. She does not disclose the reason. Accordingly, the first step in examining data is to understand whether it is obtained in a state of statistical control. The easiest way to analyze data is to arrange the points in the order in which they appear to see if there is any benefit to be gained from the distribution generated by the data.

On fig. 6 shows the distribution of the results of measurements of 50 springs of the same type used in a camera of a certain type. The springs were measured in tension under a force of 20g. The distribution looks pretty symmetrical... Any attempt to use the distribution shown in fig. 6 is useless. For example, calculating the standard deviation for a given distribution will not provide a value that can be used for prediction. It says nothing about the process because it is unstable.

Rice. 6. Normally distributed but statistically uncontrolled data

A process is reproducible only if it is stable.

A common mistake in interpreting observations is to assume that every event (defect, error, accident) can be attributed to someone (usually someone at hand) or linked to some particular event. The fact is that most of the problems of the service sector and production are connected with the system. Sometimes the defect is really local and can be attributed to the incompetence or laziness of the worker. We will call system defects general causes, and defects associated with transient, fleeting events, special causes.

The confusion of general and special causes leads to disruption of plans, to greater variability and increased cost. Based on my own experience, I can give the following assessment for most problems and opportunities for improvement:

• 94% of problems belong to the system (management responsibility);
• 6% of problems are special.

Good management and good control presuppose the ability to make calculations to separate the two types of causes.

We can now formulate two sources of waste arising from the confusion between specific and general causes of variation.

1. Attributing variation or error to a particular cause when in fact the cause belongs to the system (general causes)
2. Attributing a variation or error to a system (general causes) when in fact that cause is a particular one.

regulation is common feature mistakes #1. Inaction, instead of looking for a specific cause, is a common symptom of error #2.

Shewhart recognized the fact that even good managers make mistakes of one kind or another from time to time. He realized that practical rules were needed to try to minimize the net economic loss caused by both types of errors. To this end, he calculated three-sigma control limits. They, in a wide range of future and past unknown circumstances, provide sound and economical guidance for minimizing the economic loss from both types of errors.

Stable process, i.e. one in which there are no signs of special causes of variations, following Shewhart, is called statistically controlled, or stable. In the state of statistical control, all special causes previously identified have already been eliminated. The remaining variability is determined by chance, that is, by general causes, unless a new special cause suddenly appears. This does not mean that we have nothing to do in a state of statistical control, just that we should not overreact to booms and busts, such a reaction will only lead to additional variations and increase the number of problems. The next step is a continuous effort to improve the process. Process improvement is effective only when a state of statistical control is achieved and maintained.

Funnel Monte Carlo experiment. A frightening example of rule 4 is in the training of a new employee. This newcomer in a few days himself teaches the next newcomer. At the same time, the methods that are taught degrade indefinitely. But who knows about it?

Control limits are not tolerance limits. Control limits, as soon as we have really reached the state of statistical controllability, characterize this process and give a forecast for tomorrow. The control chart is the voice of our process. The distribution of a quality characteristic that is in a statistically controlled state is stable and predictable, day after day, week after week. Output and costs are also predictable. Now you can think about the kanban system or just-in-time deliveries.

Moreover, as William Conway pointed out, engineers and technologists become more inventive, more creative, take more initiative to improve the process, as soon as they see that it is in a statistically controlled state. They feel that further improvement is their job. Without statistical methods, attempts to improve a process are guesswork, which usually only makes things worse.

Two Main Ways to Use Control Charts

1. To make a judgment. Was the process (in the past) in a statistically controlled state?
2. To justify action (continuous). The control chart can also be used to achieve and maintain a state of statistical control during production. In this case, the process has already been brought to a statistically controlled state. We propagate control limits into the future, and plot points one by one.

It is sometimes useful to build a control chart for each member of the work team. The worker, seeing a point outside the control limits, can almost always immediately identify the special cause and rule it out. Such a map is analyzed only by the worker and his immediate supervisor.

There are many misconceptions about reproducibility. It is absolutely wrong, for example, to take a certain number of products, for example 8, 20, 50 or 100, measure them and use 6 standard deviations obtained from these measurements as a measure of process reproducibility. The first step should be to analyze the data using a process flow chart to decide if the manufacturing process and measurement system demonstrate statistical controllability. If so, then the reproducibility of the process will be evident from the control chart. If not, then reproducibility does not exist.

The experiment with red beads is so characteristic that.

Statistical control does not exclude the presence of defective products. Statistical control is a state in which variations are random and stable in the sense that their limits are predictable. The process may be in a statistically controlled state, yielding defective products. By itself, the statistical controllability of the process is not the ultimate goal. Once the process is stable, serious work can be done to improve the quality and economy of production.

An example of misunderstanding. The line of action is mapped based on judgment, not calculation. As we have learned, the limits on the control chart are about what to expect from the process, not what we would like it to be. Suppose a worker plots a line on a map showing the percentage of defective items per day. He draws (for example) a line at 4%, which he thinks would be a reasonable target. He showed me a point high above this line. Here, he said, is a point that has gone out of control. "Where are your control limit calculations?" I asked. “We don't count; we're just putting the line where we think it should be." Unfortunately, some textbooks mislead the reader into allowing control limits to be set based on tolerances or other requirements.

People are part of the system; they need help. While management is responsible for the system, or the lack of it, I own experience convinced that few people know what constitutes a system. When I talk about a system, many people think of hardware and data processing. Few people know that hiring, training, supervising and assisting production workers is part of the system.

Chapter 12

Examples are given, emphasizing that the responsibility for improving the system lies with management, which is obliged to understand the situation and act according to the circumstances.

Chapter 13

For every problem there is a solution: simple, elegant and wrong
(Perhaps borrowed from H. Mencken)

The examples in this book show that people do not understand four fundamental principles:

• Several points in a group must be above the group average.
• Not all points will lie on the midline (except for rare coincidences).
• It is rare that the state of statistical control is accompanied by variations in quality and quantity, however, jumps of points up and down satisfy the criterion of randomness. In other words, variations are stable. Controlled quality characteristic is stable, constant; it plays hour after hour. Responsibility for reducing variation and for more suitable value the point of adjustment lies almost entirely with management.
• There are not only special, but also general causes of losses and variations due to the system.

Chapter 14

This chapter contains two quality audit reports prepared for the management of the company, which describe its real problems and give recommendations for their elimination. …the barrier is the management belief that production workers are responsible for all problems because they are doing their job wrong. The natural reaction of people to any production problems is to blame the operators. In my experience, most production problems stem from common causes, which only management can solve or reduce.

As for special reasons. I found that your company does not have a system feedback with the production worker, by means of which he is informed when he himself must act in order to improve his work. Special causes can only be detected with the right statistical methods. In order for workers to master statistical tools, extensive training is needed. You have to train hundreds of workers to use simple control charts.

The production worker, when he reached the state of statistical control, had already put everything he had into the process. It is the responsibility of management to provide greater uniformity of input materials, greater uniformity of upstream operations, better equipment setup, better maintenance, process changes, sequence changes, or some other fundamental change.

…despite the abundance of numbers that are given so much attention in your company, you do not discover the root causes Bad quality. Expensive computers processing a lot of data will not improve the quality.

Mention should also be made of the misconception that many managers have, namely that in order to work with a process, the consultant must know everything about it. Practice shows the opposite. A competent person in every place, from the worker to the top management, knows everything about his work, except for how to improve it. Help to improve can only come from outside.

Chapter I5. Plan to minimize the average cost of control of incoming materials and finished products

The principle of input control "all or nothing".

The above theory is applicable to the operation of a bank, department store, trading company making mistakes on payrolls, and most other situations. The flow of work moves from stage to stage, the end point is the consumer's account, or the numbers on the check, or the report. The work may go through several stages before the error is discovered. By this point, the cost of fixing it could be 20.50 or 100 times the cost of finding it and fixing it at the point of origin.

Finding errors in service operations is perhaps even more difficult than in manufacturing. The verifier can detect only half of the mistakes made, or in best case two out of three. My experience is that parallel work of employees and comparison of results with the help of a machine is the only satisfactory way to check critical work.

The consensus that results from a discussion in which people are not afraid to speak their mind and ask questions, speaks of a healthy team spirit and benefits through interaction and learning from each other. Unfortunately, agreement at the control stage or elsewhere can only mean that one imposes his opinion on the other.

Chapter 16

The main problem of management, leadership and production, as my friend Lloyd Nelson formulated it and as we have emphasized in previous chapters, is a misunderstanding of the nature of variation and an inability to interpret them. The efforts and application of methods to improve quality and productivity in most companies and government agencies are fragmented, do not require an overall competent leadership, nor a coherent system of continuous improvement. Everyone, regardless of their position, needs training and development. In an atmosphere of fragmented efforts, people move in their own direction, not being able to bring great benefits to the company, and even more so to develop.

Companies stock up on material components but ignore the need for knowledge.

Chapter 17

The reader must have noticed with what tenacity, page after page, I called for clearly defined terms of reference and work instructions.

Data on incidents does not affect the reduction in their number. The first step to reducing the frequency of incidents is to determine who or what causes them: whether the system is at fault, or a specific person, or a certain set of conditions. Statistical methods give only the right way analysis to understand the nature of incidents and reduce their number.

People tend to look for the culprit directly at the scene. The typical reaction of almost every person to unpleasant event- attribute it to someone else's negligence or equipment failure. It is wiser to refrain from hasty conclusions that are fraught with an incorrect conclusion, it is wrong decision, continued troubles, an increase in the number of incidents. The system ensures that the average number of incidents (by location and time) is unpredictable.

Appendix. Transformations in Japan

Serious passions rage around the writing of the author's name... 🙂 On the one hand, on the site Deming Associations the name is spelled Edward. On the other hand, in English writing, the letter s is clearly present - Edwards. Finally, there is no such name in principle English language. But the surname Edwards is very popular and is even among 100 most common English surnames. I don’t know what to think… Assuming that I will be subjected to terrible criticism, I risk hypothesizing that in writing William Edwards Deming, the first word is a given name, and the second and third are a double surname… 🙂

Update October 4, 2017 My guess was confirmed: Edwards is the mother's surname.

In my opinion, the foreword by Y. Adler, Y. Rubanik, V. Shper is of great independent importance. Also noteworthy is the bibliography at the end of the preface.

Deming, William Edwards (October 14, 1900 – December 20, 1993), also known as Edward Deming, was an American academic, statistician, and quality management theory consultant. Deming is best known for his innovative proposals for reorganization of enterprises, widely used in Japan and other countries under the name "lean manufacturing".

Deming was educated at Yale State University.
He is one of the founders of the American Society for Quality Control, established in 1946. He was awarded one of the most prestigious awards established by this society - the Shewhart Medal.

Japan first visited in quality control proved to be perceived by the top executives of Japanese companies. The need to study and implement methods of statistical control was recognized, and a massive training process for managers was organized in Japan.

In recognition of the merits of E. Deming, in 1951, an award named after him was established in Japan, which has been awarded annually since then to companies for outstanding success in improving quality and individuals for significant contributions to the theory and practice of quality management. The award is given in the form of a diploma and a silver medal with the profile of Dr. E. Deming.
Dr. Deming has been awarded the US National Medal of Technology and is inscribed in the Hall of Fame for achievements in science and technology. In 1960, Dr. E. Deming was awarded the Order of the Blessed Treasure, 2nd degree. This is one of the highest orders of Japan, awarded on behalf of the emperor.
There are associations named after him in many countries of the world.

This book is for those who have already understood that business cannot be done by traditional methods, because the world has changed.
Edwards Deming, an outstanding consultant of the 20th century, one of the authors of the "Japanese economic miracle", throws down an intellectual and moral challenge to the stereotypes of traditional management. His revolutionary theory offers the philosophy, methods and management technologies necessary to build a sustainable, efficient business that balances the interests of all stakeholders: consumers, employees, owners, suppliers, society as a whole.
The proposed principles and concepts are illustrated by numerous examples from various industries industry, services and management.

14 Deming Principles.

1. Consistency of Purpose: Set a goal and be consistently firm and consistent in achieving your stated goal of continuous product and service improvement by allocating resources to meet long-term goals and needs, not just short-term profitability, in order to achieve competitiveness, sustain the business, and providing people with jobs.
2. New Philosophy: Adopt a new philosophy. We are in a new economic era started in Japan. We can no longer live with the usual level of delays, errors, defects in materials, defects in workmanship. A transformation of the Western style of management is needed to stop the ongoing decline of the economy.
3. End dependence on mass inspection: Eliminate the need for mass testing and inspection as a way to achieve quality, primarily by building quality into products. Demand statistical evidence of "built-in" quality, both during production and in purchasing functions.
4. End the practice of purchasing at the cheapest price. Instead, along with the price, demand serious confirmation of its quality. Reduce the number of suppliers of the same product by eliminating the services of those who could not statistically confirm its quality. Strive to obtain all supplies of a given component from only one manufacturer, on the basis of establishing a long-term relationship of mutual loyalty and trust. The goal in this case is to minimize the total cost, not just the initial cost.
5. Improve every process. Improve constantly, today and always, all processes of planning, production and delivery of services. Constantly look for problems in order to improve all activities and functions in the company, improve quality and productivity, and thus constantly reduce costs. Continuous improvement of the system, including development and design, supply of components and materials, maintenance and improvement of equipment operation, management and organization methods, training and retraining of personnel, is the first responsibility of management.
6. Put into practice training and retraining: Put into practice modern approaches to training and retraining for all employees, including managers and managers, in order to better use the opportunities of each of them. Keeping up with changes in materials, methods, product design, equipment, technology, functions and maintenance methods requires new skills and abilities.
7. Establish leadership. Understand and practice leadership as a way of working to help people do their best work. Managers at all levels should be responsible not for bare numbers, but for quality. Improving quality automatically leads to increased productivity. Supervisors and managers must ensure that immediate action is taken when defects are reported, faulty or malfunctioning equipment, poor tools, unclear work instructions, and other factors detrimental to quality.
8. Cast out fears. Encourage effective two-way communications and use other means to root out fears, fears, and hostility within the organization so that everyone can work more efficiently and productively for the good of the company. Any employee who fears his superior cannot properly cooperate with him. The best that can be expected in such circumstances is resentful humility, which is exactly what such a leader desires. However, this state of affairs will never lead to good results. True collaboration accomplishes much more than isolated individual efforts. But this interaction cannot be good if mutual trust, confidence and respect are not cultivated. Those who work in fear tend to slip out of the sight of those they fear. And how can you expect a return corresponding to potential opportunities from people whose main desire is simply not to be noticed?
9. Destroy the barriers between divisions, services, departments. People from different functional departments - researchers, developers, manufacturers, representatives of commercial and administrative services - must work in teams (teams) in order to eliminate problems that may arise with products or services. Most companies are organized on a functional basis, but they must work in conditions of functional interaction.
10. Give up empty slogans and appeals. Refuse to use posters, slogans, and calls to workers that demand defect-free work from them, a new level of productivity, etc., but do not say anything about methods to achieve these goals. Such appeals only evoke hostility; the bulk of poor quality and performance problems are system-related and thus beyond the capacity of ordinary workers to solve.
11. Eliminate arbitrary numerical norms and assignments. Eliminate work instructions and standards that set arbitrary norms, quotas for workers, and quantitative targets for managers. Replace them with support and assistance from senior management in order to achieve continuous improvements in quality and productivity.
12. Give employees the opportunity to be proud of their work. Eliminate the barriers that rob workers and managers from taking pride in their work. This implies, among other things, the abandonment of annual appraisals (assessments of the performance of employees) and the methods of Management by Objectives. And again, the responsibilities of managers, supervisors, masters must be shifted from achieving purely quantitative indicators to achieving quality.
13. Encourage the pursuit of education. Establish a vigorous self-improvement education and support program for all employees. An organization needs more than just people, it needs workers who improve as a result of education. The source of successful progress in achieving competitiveness is knowledge.
Commitment to quality improvement and top management effectiveness.
14. Clearly define top management's unwavering commitment to continual improvement in quality and performance and their commitment to putting all of the principles discussed above into practice. However, not only will top management sincerely proclaim their eternal commitment to quality and performance. It must also know what is what they are committed to, that is, what they must do. Establish a structure in senior management that will give impetus to progress towards the above 13 principles every day, and act to bring about change. Support is not enough here, concrete deeds are needed.

What did you do?

He taught the Japanese the methods of work, thanks to which their industry is now considered one of the best examples. Raised all of Japan after World War II.

However, no one has been able to repeat the success of Japan. Even the Americans couldn't. It's all about the special mentality of the Japanese:

What exactly is the legendary management consultant criticizing in his book?

Analysis of quotes from the book:
In America, it is widely believed that quality and volume are incompatible, you cannot choose both at the same time. A clear answer to the question "Why does productivity increase when quality increases?" I received from 22 industrial workers when meeting with me "Less rework. And less wastage."

- How much can we reduce the quality without losing consumers?
- This question is the height of misunderstanding of the problem. The Japanese are on the path of improving quality without looking at the numbers. So they increase productivity, reduce costs and conquer markets.

The Japanese are not idiots, but the Americans are not idiots either, don't la-la. The American again asks about excessive processing, about additional operations. The American knows that improving the system is also not a free pleasure, and the more high peak we try to climb, the more expensive each next step.

Ask the Chinese, who have already taken over the lion's share of world production. Do they win markets by improving quality? Haha! Not! More:

The Japanese improve the quality regardless of the numbers. Okay, there is a counterexample. One company produced metal for its regular customer. The metal had a certain degree of purification, that is, it always had some impurities, which are difficult to completely get rid of. In general, everything suited the consumer, but the manufacturer decided to improve the quality by further raising the degree of metal purification from impurities. This caused a slight price increase. The consumer was surprised why the metal suddenly went different from what it was before. According to technology, they needed exactly the one they bought, with that degree of pollution. So they melted it themselves and added contaminants. This is not an invention.

And there can be many such examples. No need to improve the quality "neglyadya". It is necessary to raise it wisely, which the American was interested in.
And even more so, it coincides with one of the 8 deadly sins - "Overprocessing". This is an attempt to add more value and quality to the product than the customer needs, than the customer is willing to pay.

Manufacturing workers in Japan have always known that defects and inaccuracies that are visible to the consumer lead to loss of the market and can cost them their jobs.

In the Russian Federation, I have not seen workers talk like that. In general, there is not a single line in any book about Japanese production about problems with motivation. It seems that there is simply no such problem. They need to pay tribute, if only because they had no natural resources in the country.

A 200% OTC check is less reliable than a 100% one, because each controller hopes for another controller, and signs without looking. Shared responsibility means no one is responsible.

That's for sure.

Deming's 14 Key Principles

I'm more for the American style of management. it is 100% logical. The Japanese style does not always lend itself to logic, and sometimes looks like bad advice specially written for enemies. But in fact, these tips look harmful only if they are embedded in pieces in American management. Then yes. They look organic only in the Japanese style of management, along with other principles.

1. Set a goal and be unfailingly firm and consistent in achieving your stated goal of continuous product and service improvement by allocating resources to meet long-term goals and needs, not just momentary profitability, in order to achieve competitiveness, keep the business and keep people employed.

The opposite of this looks like this:

2. New philosophy: Embrace a new philosophy. We are in a new economic era started in Japan. We can no longer live with the usual level of delays, errors, defects in materials, defects in workmanship. A transformation of the Western style of management is needed to stop the ongoing decline of the economy.

3. : Eliminate the need for mass testing and inspection as a way to achieve quality, primarily by building quality into products. Demand statistical evidence of "built-in" quality both during production and in purchasing functions.

4. Instead, along with the price, demand serious evidence of its quality. Reduce the number of suppliers of the same product by eliminating the services of those who could not statistically confirm its quality. Strive to obtain all supplies of a given component from only one manufacturer, on the basis of establishing a long-term relationship of mutual loyalty and trust. The goal in this case is to minimize the total cost, not just the initial cost.

5. Improve constantly, today and always, all processes of planning, production and delivery of services. Constantly look for problems in order to improve all activities and functions in the company, improve quality and productivity, and thus constantly reduce costs. Continuous improvement of the system, including development and design, supply of components and materials, maintenance and improvement of equipment operation, management and organization methods, training and retraining of personnel, is the first responsibility of management.

6. Put into practice modern approaches to training and retraining for all employees, including managers and managers, in order to better use the opportunities of each of them. Keeping up with changes in materials, methods, product design, equipment, technology, functions and maintenance methods requires new skills and abilities.

7. Understand and practice leadership as a way of working to help people do their best work. Managers at all levels should be responsible not for bare numbers, but for quality. Improving quality automatically leads to increased productivity. Supervisors and managers must ensure that immediate action is taken when defects are reported, faulty or malfunctioning equipment, poor tools, unclear work instructions, and other factors detrimental to quality.

8. Encourage effective two-way communications and use other means to root out fears, fears, and hostility within the organization so that everyone can work more efficiently and productively for the good of the company. Any employee who fears his superior cannot properly cooperate with him. The best that can be expected in such circumstances is resentful humility, which is exactly what such a leader desires. However, this state of affairs will never lead to good results. True collaboration accomplishes much more than isolated individual efforts. But this interaction cannot be good if mutual trust, confidence and respect are not cultivated. Those who work in fear try to slip out of sight of those they fear. And how can you expect a return corresponding to potential opportunities from people whose main desire is simply not to be noticed?

It is clear that a person has never encountered the motivation of staff. Japan doesn't seem to have these problems at all. In the Russian Federation, the employer tries to intimidate employees not from a good life, but because often this is the only way to get them to work. No, seriously, how are you going to implement this principle? Explain why anarchy and chaos will not arise?

Ok, take a look at this:

They shout in translation something like "I will do it, and today!!!"

They are ready to do so. Therefore, I can believe that they do not need to be additionally motivated by fears.

And you make these people yell (or treat work) the same way:

Again. This is not a management book. This is a book on managing the JAPANESE. Even the Americans did not want to work like that. Well, here at , for example, not so. It's all about fear and violence. So what? He has rockets flying into space!

Want to see the real power of fear? Here she is:

This article is about the fact that the USSR developed economically faster than the leading capitalist countries. Most of the data presented in the article was indicated in the statistical studies of Western scientists, the CIA, the IMF, the UN and the World Bank.The graph shown in the picture shows the ratio of the GDP of the USSR, the Russian Federation and the USA per capita for 1885-2006. The graph was compiled by Illarionov A.N.