A Summary of Deming’s “14 Points for Management”
While Michael Moskowitz, Director of Human Resources for Md7 has an extensive background in human resources, he also has taught a course at the University of California, San Diego (UCSD) for the last 26 years on “Training and Development” in the Business and Management Certificate Program.
Michael wrote a book specifically for this class entitled A Practical Guide to Training and Development. Michael has incorporated many of the lessons from this book into the training programs at Md7. The follow is an excerpt from this book.
Edwards Deming was born in Sioux City, Iowa, and earned a B.S. in electrical engineering from the University of Wyoming, an M.S. from the University of Colorado and a Ph.D. from Yale University, after which he interned at Bell Laboratories. Both graduate degrees were in mathematics and physics. Deming went to Japan after World War II to help set up a census of the Japanese population. While he was there, he taught statistical process control (SPC) methods to Japanese business leaders and engineers. SPC, pioneered by Walter Shewhart in the early 1920s and applied by Deming in the United States during World War II, is an effective method of monitoring a process by collecting data at various points within the process and analyzing variations in output. The end result is manufacturing high-quality goods while reducing waste, increasing the likelihood of customer satisfaction because problems will not be passed along to the customer (or end-user) of the product and /or service.
Deming witnessed Japan’s extraordinary economic growth, watching them put into practice the methods he had taught. He stressed that improved quality would result in reduced expenses, increased productivity and market share. In 1960 he was awarded a medal by the Japanese Emperor and is regarded by many observers as having more impact on Japanese business than any individual not of Japanese descent. He later became a professor at New York University and a consultant in Washington, D.C., to government and business leaders.
From 1979 to 1982 the Ford Motor Company incurred more than $3 billion in debt. Deming went to work for the company in 1981. After adopting Deming’s principles as well as focusing on changing management behavior and organizational culture, Ford became the most profitable American auto company, exceeding the earnings of arch rival General Motors for the first time since the 1920s.
In the midst of his work with Ford, Deming published Quality, Productivity, and Competitive Position (1982), which was renamed Out of the Crisis (1986) and included his now famous 14 Points for Management. He believed that these philosophies, if adopted by the manufacturing sector would save the United States from industrial doom at the hands of the Japanese. Paraphrasing Deming’s 14 points, he stated the following:
- Create constancy of purpose toward improvement.
Replace short-term reaction with long-term planning to be competitive and stay in business. Decide to whom top management is responsible.
- Adopt the new philosophy.
No longer accept current level of delays, mistakes, defective materials, and defective workmanship. The implication is that management should actually adopt this philosophy, and a philosophy of cooperation between employees, management, customers, and suppliers, rather than merely expecting the workforce to adopt a new philosophy.
- Cease dependence on inspection.
Instead, require statistical evidence that quality is built in. If variation is reduced, the need to inspect manufactured items for defects is unnecessary because there won’t be any. Prevent defects instead of trying to detect them.
- Move toward a single supplier for any one item.
Multiple suppliers means greater opportunity for variation in source product quality. Depend on meaningful measures of quality along with price. Eliminate suppliers that cannot qualify with statistical evidence of quality.
- Improve constantly and forever.
Constantly strive to reduce variation. Find problems.
- Institute training on the job.
If people are inadequately trained, they will not all work the same way, and this will introduce variation.
- Institute leadership.
There is a difference between leadership and supervision, the latter being quota and target based. Shift to a focus on quality which will automatically improve productivity. Management must take immediate action when alerted to process problems.
- Drive out fear.
Management by fear is counter-productive in the long term because it prevents employees from acting in the organization’s best interests.
- Break down barriers between departments.
Producing a quality product and/or service for the external customer is a team effort that requires cooperation inside the organization. The concept of the internal customer is reinforced when each department serves other departments that use its outputs.
- Eliminate slogans.
It’s not people who make the most mistakes – it’s the process they are working within. Harassing the workforce with exhortations without improving the processes they use is counter-productive.
- Eliminate management by objectives.
Production targets encourage the delivery of a quota of quality products and services without regard to their quality.
- Remove barriers to pride of workmanship.
Pride of workmanship increases employee satisfaction.
- Institute a vigorous program of education and self-improvement for everyone.
- The transformation is everyone’s job.
Create a top management structure that will push everyday on the previous thirteen points.
Deming received criticism for his 14 Points for Management because he did not include implementation tools to help bring his management philosophy to fruition. When asked why he didn’t provide this sort of assistance, his response was “You’re the manager; you figure it out.”