The W. Edwards Deming Institute Blog

Posts Tagged ‘cost cutting’

Improving the System to Reduce Costs Isn’t Equal to Cost Cutting

Real benefits come when managers begin to understand the profound difference between “cost cutting” and “eliminating the causes of costs.” Brian Joiner in Fourth Generation Management Cutting costs by fiat via executive orders reduces the capability of the organization. Those costs are often born by customers. In the short term reducing costs in such a […]

Minimize Total Cost

End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. Point 4 in Dr. W. Edwards Deming’s 14 Points for Management This point is one of the less controversial points (at least […]

Deming Chain Reaction

From page 3 of Out of the Crisis The prevailing action during the crisis Dr. Deming alluded to in the title of his books was to cut costs to improve profits. Massive layoffs of employees would get executives big bonuses and send stock prices up. Sadly focusing on cost cutting and layoffs is too often […]