The W. Edwards Deming Institute Blog

The Gift of Dr. Deming

Dr. W. Edwards Deming believed that everyone has a right to joy in work. That everyone in an organization can, and should win. Today, on Dr. Deming’s Birthday, we honor him and celebrate his gifts to each of us. And we thank you, for ensuring that his legacy lives on through your belief in the Deming philosophy. You are the reason that his life’s work continues to improve lives today. Through his philosophy, we see everything in a new light. Deming gave us a unique view that brings clarity, cooperation, new knowledge, improvement and joy. It teaches us to recognize the power of collaboration in achieving our aims in all aspects of our lives. Thank you for being a part of a community that is bringing Deming’s light to the world, so that everyone can win. 

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Customer Satisfaction and The Deming Way at Gallery Furniture

Guest post by John Hunter, founder of curiouscat.com (in 1996).

This short interview with Jim McIngvale (Mattress Mack), owner of Gallery Furniture, explores Deming’s continued influence on the management practices of Gallery Furniture.

Over the years we really learned to check your understanding with the customers. Dr. Deming taught us those type of things.

I think the biggest thing we did is enable the people to make more decisions, empower the employees, and treat the employees with an aura of let’s fix the problem, not fix the employee. People want to do a good job. We just have to give them the tools to do a good job.

The passion Mattress Mack has for customers and Dr. Deming comes through in this interview. Gallery Furniture‘s commitment to all the stakeholders (customers, employees, and community) has been strong for decades. That commitment to community often is newsworthy (see Mattress Mack vs. Tropical Storm Imelda from last month).

He ends the Tropical Storm Imelda video with a great message encouraging politicians to focus efforts on fixing the systemic problems that led to such flooding in Houston. Don’t just do a good job of dealing with the bad results of the current system; do that and then figure out how to improve the system so you avoid those bad results in the future. That is exactly the type of thinking that Dr. Deming encouraged.

Related: Transformation ParadoxAnother Quota Failure ExampleKevin Murphy’s Presentation: Application and Lessons of Deming’s Perspective on LeadershipBad Weather is Part of the Transportation SystemDeming Lens Episode #2


Reflections on the Fabric of the Toyota Production System

Guest post by Bill Bellows, Member of The Deming Institute’s Advisory Council.

The content of this blog was prepared as an article for the first edition of the Lean Management Journal, later known as The LMJ. This article is the first of a series I am preparing in collaboration with Dick Steele, a Board Member of The Deming Institute, to offer our thoughts on the legendary Toyota Production System and its connection to the management system within Toyota and how it was inspired by Dr. Deming.

 

Beginning with early accounts of the prowess of the legendary Toyota Production System (TPS), this article offers personal reflections on the fabric of TPS and present day explanations of Lean.

In the late 1960s, Frank Pipp, an assembly plant manager for a Ford Motor Company factory, instructed his staff to purchase competitor’s cars. His plan was to have the final assembly team disassemble these cars and learn firsthand how they were assembled. At that time at Ford, if two connecting parts could be assembled without the use of a handy rubber mallet, then these parts were known as “snap fit.” In his account to Xerox, CEO David Kearns (Reference: Prophets in the Dark, by David Kearns), the remaining parts required mallets to assemble. To Pipp’s amazement, one car purchased was 100% snap fit. He did not believe the results and instructed the team to repeat the assembly operation. They did and found again that the Toyota pick up truck was 100% snap fit. The discovery was not lost on Pipp. In contrast, he noted that the “Dearborn people,” from Ford’s corporate offices, were invited to look over the truck themselves and witness the assembly team’s discovery. According to Pipp:

Everyone was very quiet, until the division general manager cleared his throat and remarked, ‘The customer will never notice.’ And then everyone excitedly nodded assent and exclaimed, ‘Yeah, yeah, that’s right,’ and they all trotted off happy as clams.”

Pipp’s documentation of the striking difference in the assembly process within Toyota, by comparison to Ford, was to be found again in the early 1980s when teams from both Ford and General Motors began to routinely visit Toyota’s operations in Japan. 

Larry Sullivan, from Ford, wrote an account of the visit he made to Japan in 1982 to “study quality systems at a variety of automotive suppliers.” (Reference – Reducing Variability: A New Approach to Quality, L.P. Sullivan, Quality Progress, July 1984). Included were these remarks:

The most important thing we learned was that quality in those companies means something different from what it means in the U.S. – that it is in fact a totally different discipline. Over the years, Japanese managers, engineers, and workers have been very successful in reducing manufacturing costs by adopting more enlightened quality thinking and by applying more technical quality methods. In other words, quality in itself has not been the primary motivation in Japan; profit is the main objective and quality (methods) is merely a means to improve profit…Of foremost importance is the new definition of ‘manufacturing’ quality as minimum variation from target.

With the preceding account by Larry Sullivan as a second reference point, consider what happens when a craftsman works on the design of a product at home, where the customer and producer are often one in the same. One person designs the product, procures the raw material, fabricates the corresponding parts, and then assembles them into the final product for personal use. The producer-as-customer is quick to judge the product quality and adjust the design-procurement-fabrication-assembly process, as needed, should the resultant product quality fall short of expectations. This system of feedback is much the same was what was explained by W. Edwards Deming to several dozen executives in Japan in 1950. Specifically, he suggested to them that they view “production as a system” and left them with the now famous process diagram below.

Figure 1 – Production Viewed as a System

As shown in Figure 1, consumer research in this process is essential to providing feedback on the product design to address shortcomings, if not suggestions, for product improvement. Such a viewpoint of gathering consumer feedback is considered vital to organizations seeking to improve product quality. These efforts are often aligned through a non-linear process improvement cycle that resembles the hand drawn version of this figure, which Deming shared with Japanese executives long before the aforementioned discoveries by Frank Pipp and Larry Sullivan. Years later, in 2005, Dr. Shoichiro Toyoda, Chairman and former President (1982-1999) of Toyota, accepted the American Society for Quality’s Deming Medal. In doing so, he offered:

Every day I think about what he meant to us. Deming is the core of our management.”

While the do-it-yourselfer in the garage is not necessarily a master craftsman, the connection to the model of a single person engaged in most of the design-procurement-fabrication-assembly tasks is relevant to the topic of quality and an appreciation of the Toyota Production System and how it differs from a mass production system. Likewise, the resulting product quality of a master craftsman is relevant and the association of Toyota’s products with leading levels of quality will be explained later in this article as the difference between “part” quality and “part of” quality. 

Fast forward to the mid-to-late 1980s, when a research team at the Massachusetts Institute of Technology, led by Daniel Jones, Daniel Roos, and James Womack, surveyed production systems at 90 automobile assembly plants in 17 countries. Their conclusion was that the results from these plants could be very neatly affinitized into three subgroups that fell along geographic lines; Europe, the U.S., and Japan. Coinciding with these categories were the labels “craftsmanship” and “mass production” for Europe and the U.S., respectively. A new term, Lean, was needed to describe the artful blending of craftsmanship, and its attention to detail in relationships, with the speed and low cost of mass production.  

Before the era of mass production was envisioned in the late 1700s, craftsmen were relied upon to deliver products of superb quality to those who could afford them. As an alternative to this high quality – high cost model, Honore Blanc, envisioned an alternate production model with drastically reduced costs. Blanc, who lived in France, is given credit for conceiving the production model of “interchangeable parts” as an alternative manufacturing method to craftsmanship; one which could deliver lower-cost products to the masses. At this time, Thomas Jefferson was the U.S. Ambassador to France. Jefferson later became the visionary champion for the adoption of interchangeable parts as a strategy for production within the U.S. After Blanc declined his offer to move to the U.S., the idea of interchangeable parts was shared with Eli Whitney. Long before Henry Ford’s moving assembly line, Whitney is given credit for leading the way for the implementing interchangeable parts within the U.S. (soon to be known as the American method of production), and his company was the first to be given a contract from the U.S. government, in 1798, for the design and manufacture of a product (a rifle) with interchangeable parts. 

As a personal example of craftsmanship, let’s return again to the example of the do-it-yourselfer in the garage, this time doing home repair. 

Imagine that a piece of wood molding is needed to replace a damaged length of wood in between two existing pieces. We begin with a piece of molding that is too long and needs to be cut to length. In rapid order, the required length is measured, and the piece is marked for cutting. As a next step, a saw is readied. Consider how many lines one typically would draw across the top face of the wood before making the cut. That is, instead of using short marks to indicate where to place the saw, how many lines would be drawn across the top face to guide the placement of the saw blade during the cut? Most often the solution is to use a single line and subsequently cut close to this line. Why is the habit not two lines, as in the standard industry use of manufacturing tolerances with an acceptable range, in keeping with the practice of interchangeable parts? The “single line” answer implies a belief that there is a “target” length for this piece of molding and indicates a strong intuitive sense of knowing that the piece of wood is “part of” something rather than merely a “part.” A “part of” perspective is likely when engaged in a home improvement project where connections are visible and immediate. In the molding example, the lesser quality of the fit if the piece is longer or shorter than desired will be obvious. Any effort required to adapt the molding piece, because of variation in its length – a little too long or too short – represents Quality Loss, a concept introduced and developed in Japan by Genichi Taguchi.

Figure 2 – Marking a piece of wood molding before cutting it to size

As shown in Figure 3, Taguchi’s Quality Loss Function model increases continuously as the piece of molding length misses the target by larger and larger amounts in both directions – shorter or longer than the desired target dimension. In either case, the extra effort (loss to the do-it-yourselfer) is both finite and real, just as the use of hammers to assemble parts at the Ford plant were finite and real to Frank Pipp and his assembly team. Could it be that such losses are accounted for and then reduced through routine efforts within the Toyota Production System to better align the organization’s resources? That is, the resources of time and effort would be invested to produce a given dimension closer to its target value, but only if this effort was less than the corresponding reduction in loss, thereby making the effort a worthwhile investment of resources. According to personal conversations with Genichi Taguchi, Toyota has been a world-wide leader in the use of his Quality Loss Function concept to direct efforts to move from the traditional “part” quality model to one in which a greater emphasis is placed on “relationship quality,” as in “how far from the target value is a given dimension?” 

According to Genichi Taguchi, Toyota’s efforts with the Quality Loss Function date back to his consultation role in the early 1950s. Within 10 years, he was honored in Japan with a Deming Prize in Literature for his contributions to a new definition of quality. Specifically, as noted by Larry Sullivan, he defined quality as “the minimum of loss a product causes to society after being shipped.” By contrast to the mass production system’s “conformance to requirements” model of quality, which remains the standard of quality in systems such as “Zero Defects” and “Six Sigma Quality,” Taguchi suggested a model that looks at quality from the vantage point of the relationship of a producer to its customer. In doing so, Taguchi acknowledged the existence of a never-ending connection (and impact) between the provider of the “part” and what it is “part of.” The technical aspects of this holistic model are shown in Figure 3, where the horizontal axis represents the specific value of a part dimension on a continuum and the vertical axis represents the associated “Quality Loss” for a corresponding part dimension. If one considers the “Quality Loss” to be the “extra effort required” for installing a part of a given dimension, the distribution (“Quality Loss Function”) theorized by Taguchi – a simple parabola centered on the target dimension (with minimum loss at target), accounts for the loss associated with dimensions that are not produced to target dimensions.

Figure 3 – Genichi Taguchi’s Quality Loss Function reflects a continuous model of part quality. Histograms 1 and 2 are examples of possible results for 2 suppliers of parts.

Taguchi’s model brings in to question the mass production belief that all parts within the range of the tolerances are “equally good,” and, therefore, absolutely interchangeable. The degree to which variation from a target dimension produces harmful effects downstream in the “organization and society” is a function of the steepness of the Quality Loss Function, which in turn depends on the specifics, or context, of the system which the part is actually a “part of.” Of foremost importance, Taguchi’s model suggests that interchangeability be modeled as something that is relative and not absolute.

By comparison to Taguchi’s model of continuous Quality Loss, the mathematical model associated with the mass production concept of “Zero Defects” is a “step-function.” Figure 3 offers a side-by-side comparison of these models. In keeping with a step-function model, all parts within tolerance are “good and equally good.” No change in quality is perceived across this range and the only changes in quality that do occur happen instantaneously at the transition across either of the two manufacturing tolerance limits. Inspired by Taguchi, and influenced by Deming, Toyota has long modeled quality as a continuous feature, rather than discrete, with a preferred value (target) that provides for minimal loss. Such a view leads to the conclusion that any deviation from a target dimension results in some degree of loss being imparted downstream by the part after its shipment to the customer

As a student of Drs. Deming and Taguchi, I have a special fondness for the systems thinking of Russell Ackoff and the cosmic interpretation of the Toyota Production System provided by H. Thomas Johnson, for what their thinking contributes to my evolving theory of how Toyota operates. For this reason, I am constantly in search of explanations of Lean that reflect the fabric of Deming and Taguchi, along with the systemic insights of Ackoff and Johnson. Beginning with this edition of the Lean management Journal, I encourage our readers to think beyond the prevailing explanations of Lean and consider the possibility that the fabric of the Toyota Production System is more closely aligned with the usage of Taguchi’s Loss Function thinking than has ever been acknowledged in the Lean literature, which remains dominated by a part-like focus on efforts such as single-piece flow, standardization, zero defects, zero waste, and the elimination of non-value work. Such a focus will needlessly limit Lean to shop-floor applications associated with volume production and continue to view employees as Taylor-like interchangeable parts.

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Purpose: To Benefit All Stakeholders

Guest post by John Hunter, author of Management Matters: Building Enterprise Capability.

Statement on the purpose of a corporation from the Business Roundtable, August 2019:

…we share a fundamental commitment to all of our stakeholders…

Delivering value to our customers…
Investing in our employees…
Dealing fairly and ethically with our suppliers…
Supporting the communities in which we work…
Generating long-term value for shareholders…

Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.

W. Edwards Deming described the purpose of an organization in The New Economics, 1993, on page 51, as:

The aim proposed here for any organization is for everybody to gain – stockholders, employees, suppliers, customers, community, the environment – over the long term.

I am glad to see the Business Roundtable agreeing with Dr. Deming, a few decades later. Turning those ideas into effective actions that lead to successful organizations is more difficult than saying you value “investing in employees,” etc. I suggest that those looking to put these ideas into action learn about how Deming’s ideas create a management system that does this well.

image of quote by Dr. Deming "Best efforts are essential. Unfortunately, best efforts, people charging this way and that way without guidance of principles, can do a lot of damage."

Creating an organization that actually works for all stakeholders and continually seeks to improve results for all stakeholders is very challenging. There isn’t a simple recipe to follow, but there are principles, concepts, tactics, and tools that make success more likely.

We hope this blog helps you create organizations that aim to continually improve the benefits to all stakeholders. Please follow the links provided in this post for more thoughts on how to do so successfully. And let us know if you have any questions or suggestions for those on a journey to serve all stakeholders.

Related: The CEOs of nearly 200 companies just said shareholder value is no longer their main objectiveThe Purpose of an OrganizationEffort Without the Right Knowledge and Strategy is Often WastedPeople Copy Examples and Wonder Why They Don’t SucceedUsing Deming’s Ideas When Your Organization Doesn’t


Ackoff on Systems Thinking and Management

Guest post by John Hunter, author of Management Matters: Building Enterprise Capability.

This video shows a Russell Ackoff presentation from 2003.

Ackoff starts with a very good explanation of analytic thinking. Then he discusses the importance of understanding systems and why that requires a different type of thinking (synthesis).

When you analyze a system you learn something but you don’t get understanding.

The result of analysis of a system is knowledge. And for the first time, in the 1950s, science distinguished between knowledge and understanding, and recognized that all the work of science has produced is knowledge – but not understanding. Understanding requires a different method of thought.

Ackoff goes on to explain why understanding systems thinking is so important for management.

A system is never the sum of its parts; it’s the product of their interaction.

The performance of a system doesn’t depend on how the parts perform taken separately, it depends on how they perform together – how they interact, not on how they act, taken separately. Therefore, when you improve the performance of a part of a system taken separately, you can destroy the system.

These ideas are extremely important. Improvement must take place with an understanding of the overall system and guided by what needs to improve. That process will likely end up requiring specific improvements in parts of the system, but with an understanding of how those improvements will interact with the rest of the system (and planned improvement in other parts of the system).

The video closes with some great insights on problem solving, which should not surprise those familiar with Ackoff. His book, The Art of Problem Solving, is excellent.

It is a joy and education to listen to Russell Ackoff’s presentations. I will be adding more blog posts on presentations by him.

The video embedded above is part 1 of 4. You can watch part 2 here.

Related: The Degree of InterdependenceDr. Russell Ackoff Webcast on Systems ThinkingA Theory of a System for Educators and Managers (Dr. Deming and Dr. Ackoff)Ackoff, Idealized Design and Bell Labs


Deming Goes Hollywood

To bring you the Deming teachings in a new, easily accessible format, The Deming Institute is Developing an Online Learning Platform called Deming Online. Filming is currently underway for this community learning center that will blend videos, e-learning courses, and virtual coaching. We are excited to give you just a small taste of what’s in store, through this video message from Kevin Cahill:

We’re thrilled to be partnering with Leslie Peters of Desert Bay Productions for this project. Leslie is a Deming enthusiast who has over 25 years of experience as an award-winning writer, producer/director, and training designer for corporate, broadcast, nonprofit, and educational clients. Her work has been recognized with more than 70 awards, including 3 Emmy Awards, 6 Emmy Nominations, 46 Telly Awards, and 24 Communicator Awards. She received her master’s degree in Instructional Design and Technology (MSIDT) from CSU Fullerton.

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Deming’s Ideas in Action: Trader Joe’s Culture

Guest post by John Hunter, author of the Curious Cat Management Improvement Blog.

An understanding of Deming’s System of Profound Knowledge provides new lenses* to view the world. Those lenses allow you to see clearly what before you may not have noticed. And that clear vision can help managers lead their organizations more effectively.

We plan to use this blog to explore examples of management action today (using the lens of Deming’s ideas to view those actions) in order to help illustrate how Deming’s ideas can be put into practice. We can learn both from organizations intentionally applying Deming’s ideas and those that are not necessarily doing so.

Trader Joe’s has a strong culture of respect for employees and customer focus. Those principles are fundamental to Dr. Deming’s management system. Let’s examine some of the text from the careers page on their website.

painting of text at original Trader Joes

Image from the original Trader Joe’s location by Thaddeus Zajdowicz

I would like to emphasize that words on a website don’t mean much. What matters is how the culture of the organization puts those words into practice. In my experience Trader Joe’s does a very good job of operating based on the words they claim to be guided by.

We are looking for hard-working, fun people—people with a passion for food, learning, and creating delight for others.

Sure that sounds similar to what most organizations would say (though maybe not “fun people”). But as a long time customer of Trader Joe’s they have created a culture where their interest in creating delight is noticeably different from any other company I deal with. Their staff demonstrate an interest in delighting their customer and their co-workers.

Dr. Deming understood the importance of truly respecting employees. Without a culture that demonstrates that respect to employees every day, it is very difficult to have the organization treat customers with respect. When you create a culture that demonstrates to employees their value, their right to joy in work and makes clear the purpose of their work every day, that creates the conditions necessary for delighting customers.

Read the rest of this entry »


Deming on Management: The Red Bead Experiment

Guest post by John Hunter, founder of curiouscat.com (in 1996).

Dr. Deming used the Red Bead Experiment to clearly and dramatically illustrate several points about poor management practices.

The Red Bead Experiment shows that even though a “willing worker” wants to do a good job, their success is directly tied to and limited by the nature of the system they are working within. Real and sustainable improvement on the part of the willing worker is achieved only when management is able to improve the system.

As with any model this illustration oversimplifies reality but the experiment makes very powerfully points. It is hard to appreciate this without experiencing this directly yourself, but the these links may help you appreciate what can be understood.

Blog posts

Videos

Articles

Those looking for their own kit, may purchase a Red Bead Experiment kit from the Deming Collaborative.

This is the third of a series of posts that will provide resources for those interested in particular topics related to W. Edwards Deming’s ideas on management. Previous posts: PDSA cycle and psychology.


What is Deming Online?

Since we shared the “Why Deming, Why Now” video with you last month, many of you have been asking questions about Deming Online. We are so excited to tell you more about this new online learning center that The Deming Institute is creating. Not only will it preserve the integrity of Dr. Deming’s teachings in a modern format, but it will blend videos, eLearning courses, and virtual coaching, and tie into our workshops, seminars, and future webinars. People will be able to access Deming Online 24/7, on any device, from anywhere in the world.

WHAT IS THE AIM OF DEMING ONLINE?

To help millions more people discover and deepen their understanding of Deming to profoundly improve their lives, their communities, and the organizations they lead, manage, and work with.

WHY IS DEMING ONLINE BEING DEVELOPED?

To Address Today’s Problems. Deming is needed now more than ever. We live in a competitive world that is facing increasingly complex management and leadership decisions, that would greatly benefit from a different way of thinking that challenges current beliefs. The Deming Philosophy is such a timeless, collaborative, and proven solution – if only more people knew about it, could access the teachings, and apply them to their lives!

To Expand Reach. We are at risk of losing the power of Deming’s teachings simply because we cannot reach enough people. The Institute’s current in-person programs only reach about 500 people a year. We believe it is critical to expand far beyond that number.

To Improve Quality. The format of many of our educational resources is outdated. So much has changed in how people learn and access information! Deming Online will draw on contemporary didactic tools and methods to enhance learning. Its interactive, self-paced format will connect users to a wide range of Deming experts as well as peer-to-peer learning communities.

To Preserve Legacy. We believe it is critical to preserve the learning and understanding of the Deming Philosophy from the many individuals who directly collaborated with Dr. Deming, as they are an important link to the Deming teachings. We are interviewing and working with many of them in order to weave their irreplaceable knowledge and wisdom into Deming Online.

WHO IS CREATING DEMING ONLINE?

We are working with Leslie Peters of Desert Bay Productions. She is a Deming enthusiast and an award-winning writer, producer/director, and training designer for corporate, broadcast, nonprofit, and educational clients. Leslie is also an expert in adult learning, applying brain-based techniques to the capabilities of technology in order to provide a robust online learning environment.

WHAT IMPACT WILL DEMING ONLINE HAVE?

With Deming Online, we will attract new audiences and increase our learning participants – from several hundred per year, to many thousands per year. Deming Online will provide a learning pathway, so people can progress and access what is most relevant to them.

WHEN WILL DEMING ONLINE BE AVAILABLE?

It’s in production now, and the initial courses are being tested. We look forward to launching the first course in 2019.

HOW IS DEMING ONLINE BEING FUNDED? (WHAT IS THE DEMING ONWARD CAMPAIGN?)

The Deming Institute is a nonprofit, so we’ve launched the “Deming OnWard” campaign to raise the $1.5 million needed to develop Deming Online. The Institute Board and members of the Deming family are all contributing significant amounts, and we are beginning to reach out and ask supporters who understand the power of Deming’s teachings to join us and make Deming Online a reality.

LEARN MORE

Visit deming.org/onward


Alan Winlow, MBE, Honored with 2019 Deming Medal

Alan Winlow, MBE (right) is presented with the Deming Medal
by Bill Bellows, Advisory Council Member, The W. Edwards Deming Institute

20+ members of the UK Deming Community met recently in Burnsall in the picturesque Yorkshire Dales to honor Alan Winlow, MBE, as the 2019 recipient of the Deming Medal from the American Society for Quality.

Alan is the former Managing Director of Yorkshire Brick Company and Continuous Improvement Director at Marshalls, PLC. Learn more about his remarkable Deming journey in this recent interview with Alan on The Deming Institute Podcast.

Congratulations, Alan!