W. Edwards Deming: Out of the Crisis: Preface
Excerpted from http://caes.mit.edu/deming/ootc-preface.html
The aim of this book is transformation of the style of American management. Transformation of American style of management is not a job of reconstruction, nor is it revision. It requires a whole new structure, from foundation upward. Mutation might be the word, except that mutation implies unordered spontaneity. Transformation must take place with directed effort. The aim of this book is to supply the direction. Need for transformation of governmental relations with industry is also necessary, as will be obvious.
Failure of management to plan for the future and to foresee problems has brought about waste of manpower, of materials, and of machine-time, all of which raise the manufacturer's cost and price that the purchaser must pay. The consumer is not always willing to subsidize this waste. The inevitable result is loss of market. Loss of market begets unemployment. Performance of management should be measured by potential to stay in business, to protect investment, to ensure future dividends and jobs through improvement of product and service for the future, not by the quarterly dividend.
It is no longer socially acceptable to dump employees on to the heap of unemployed. Loss of market, and resulting unemployment, are not foreordained. They are not inevitable. They are man-made. …
Everyone doing his best is not the answer. It is first necessary that people know what to do. Drastic changes are required. The first step in the transformation is to learn how to change: that is, to understand and use the 14 points ... Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and people that expect quick results, are doomed to disappointment.
Solving problems, big problems and little problems, will not halt the decline of American industry, nor will expansion in use of computer, gadgets, and robotic machinery. Benefits from massive expansion of new machinery also constitute a vain hope. Massive immediate expansion in the teaching of statistical methods to production workers is not the answer either, nor wholesale flashes of quality control circles (QC-Circles). All these activities make their contribution, but they only prolong the life of the patient; they can not halt the decline. Only transformation of the American style of management, and of governmental relations with industry, can halt the decline and give American industry a chance to lead the world again.
The job of management is inseparable from the welfare of the company. Mobility, here a while and gone, from the management of one company to the management of another, is something that American industry can no longer afford. Management must declare a policy for the future, to stay in business and to provide jobs for their people, and more jobs.
…Unfriendly takeover and leveraged buyout are a cancer in the American system. Fear of takeover, along with emphasis on the quarterly dividend, defeats constancy of purpose.
Dependence on protection by tariffs and laws to "buy American" only encourage incompetence.
Deming's 14 Points
(Excerpted from Chapter Two of OUT OF THE CRISIS by W. Edwards Deming, copied from http://deming.ces.clemson.edu/pub/den/deming_philosophy.htm#points )
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. 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.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12a. Remove barriers that rob the hourly worker of his right to joy of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to joy of workmanship. This means abolishment of the annual merit rating and of management by objective
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.
The following 3 figures taken from http://www.betterproductdesign.net/maturity.htm
Origins and overview of maturity approaches
Maturity approaches have their roots in the field of quality management. One of the earliest of these is Crosby's Quality Management Maturity Grid (QMMG) which describes the typical behaviour exhibited by a firm at five levels of ‘maturity’, for each of six aspects of quality management (see Fig. 1). The QMMG had a strong evolutionary theme, suggesting that companies were likely to evolve through five phases - Uncertainty, Awakening, Enlightenment, Wisdom, and Certainty – in their ascent to quality management excellence.
Uncertainty / Stage II:
Awakening / Stage III:
Enlightenment / Stage IV:
Wisdom / Stage V:
Certainty
Management understanding
and attitude / No comprehension of quality as a management tool. Tend to blame quality department for "quality problems" / Recognising that quality management may be of value but not willing to provide money or time to make it happen. / While going through quality improvement program learn more about quality management; becoming supportive and helpful. / Participating. Understand absolutes of quality management. Recognise their personal role in continuing emphasis. / Consider quality management an essential part of company system.
Quality organisation
status / Quality is hidden in manufacturing or engineering departments. Inspection probably not part of organisation. Emphasis on appraisal and sorting. / A stronger quality leader is appointed but main emphasis is still on appraisal and moving the product. Still part of manufacturing or other. / Quality Department reports to top management, all appraisal is incorporated and manager has role in management of company. / Quality manager is an officer of company; effective status reporting and preventative action. Involved with consumer affairs and special assignments. / Quality manager on board of directors. Prevention is main concern. Quality is a thought leader.
Problem handling / Problems are fought as they occur; no resolution; inadequate definition; lots of yelling and accusations / Teams are set up to attack major problems. Long-range solutions are not solicited. / Corrective action communication established. Problems are faced openly and resolved in an orderly way. / Problems are identified early in their development. All functions are open to suggestion and improvement. / Except in the most unusual cases, problems are prevented.
Cost of quality as % of sales / Reported: unknown
Actual: 20% / Reported: 3%
Actual: 18% / Reported: 8%
Actual: 12% / Reported: 6.5%
Actual: 8% / Reported: 2.5%
Actual: 2.5%
Quality improvement
actions / No organised activities. No understanding of such activities. / Trying obvious "motivational" short-range efforts. / Implementation of the 14-step program with thorough understanding and establishment of each step. / Continuing the 14-step program and starting Make Certain / Quality improvement is a normal and continued activity.
Summation of company quality posture / "We don't know why we have problems with quality" / "Is it absolutely necessary to always have problems with quality?" / "Through management commitment and quality improvement we are identifying and resolving our problems" / "Defect prevention is a routine part of our operation" / "We know why we do not have problems with quality"
Figure 1: Crosby's Quality Management Maturity Grid (QMMG)
http://www.betterproductdesign.net/maturity.htm (continued...)
Perhaps the best known derivative from this line of work is the Capability Maturity Model (CMM) for software. The CMM takes the approach of identifying a cumulative set of ‘key process areas’ (KPAs) which all need to be performed as the maturity level increases. This is described as a ‘staged’ representation, and leads to the attribution of a single level for maturity in the range 1-5. (see Fig 2).
Optimising / Continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies / · Defect Prevention
· Technology Change Management
· Process Change Management
Managed / Detailed measures of the software process and product quality are collected. Both the software process and products are quantitatively understood and controlled. / · Quantitative Process Management
· Software Quality Management
Defined / The software process for both management and engineering activities is documented, standardised, and integrated into a standard software process for the organisation. All projects use an approved, tailored version of the organisation's standard software process for developing and maintaining software / · Organization Process Focus
· Organization Process Definition
· Training Program
· Integrated Software Management
· Software Product Engineering
· Intergroup Coordination
· Peer Reviews
Repeatable / Basic project management processes are established to track cost, schedule, and functionality. The necessary process discipline is in place to repeat earlier successes on projects with similar applications / · Requirements Management
· Software Project Planning
· Software Project Tracking and Oversight
· Software Subcontract Management
· Software Quality Assurance
· Software Configuration Management
Initial / The software process is characterised as ad hoc, and occasionally even chaotic. Few processes are defined, and success depends on individual effort and heroics / · no required processes
Figure 2: Maturity levels and process areas of the Software CMM
http://www.betterproductdesign.net/maturity.htm (continued...)
Although a number of different types of maturity model have been proposed (see Fig. 3), they share the common property of defining a number of dimensions or process areas at several discrete stages or levels of maturity, with a description of characteristic performance at various levels of granularity.
The number of levels is to some extent arbitrary. One key aspect of the Quality Grid approach is that it provides descriptive text for the characteristics traits of performance at each level. This becomes increasingly difficult as the number of levels is increased, and adds to the complexity of the tool, such that descriptive grids typically contain no more than 5 levels.