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 Improve Quality —> Costs decrease because of less rework, fewer mistakes, fewer delays, snags, better use of machine-time and materials —> Productivity Improves —> Capture the market with better quality and lower price —> Stay in Business —> Provide jobs and more jobs The prevailing action during […]