W. Edwards Deming - Part 2

Summary

The video script tells the story of Dr. W. Edwards Deming, an American statistician and management consultant whose teachings on quality and continuous improvement were highly influential in Japan, leading to the creation of the Deming Prize. Despite being largely ignored in the U.S. post-World War II due to the country's industrial dominance, Dr. Deming's principles were rediscovered in the 1980s when American industry faced competition from Japan. His philosophy emphasized respect for people and a systemic approach to quality management, which was contrary to the then prevalent American practice of acceptable quality levels. The script highlights Ford's turnaround in the 1980s, which was attributed to Deming's influence, and the eventual embrace of his teachings by American businesses. It also mentions Deming's 14 points, which serve as a comprehensive guide to his management philosophy, and notes the reluctance of American managers to adopt his ideas fully. In 1985, an American company based in Miami became the first to win the Deming Prize outside of Japan, signifying a shift in the global recognition of Deming's contributions to quality management.

Takeaways

• 🏆 **Deming's Influence in Japan**: W. Edwards Deming was highly regarded in Japan, leading to an award named in his honor, the Deming Prize, which signifies a high achievement in quality and continuous improvement for Japanese companies.
• 📈 **American Industry's Post-War Success**: Deming identified that American industry's success was due to the aftermath of World War II rather than superior management skills, and he warned against relying solely on figures and the short-term view.
• 📚 **The Importance of Theory and Training**: Deming emphasized the value of theoretical knowledge and training, noting that while costs can be quantified, the true benefits, especially in human development, often cannot be measured.
• 📺 **Deming's Second Revolution**: American television brought attention to Deming's teachings, leading to a resurgence in his influence and a reevaluation of American manufacturing practices.
• 🤔 **The Question of American Decline**: The script raises the critical question of why America was losing out to Japan, highlighting the need for a shift in approach towards quality and continuous improvement.
• 👴 **Deming's Late Recognition**: Despite his significant contributions, Deming was not widely recognized in the U.S. until later in life, when American companies began to seek his advice on quality management.
• 🚗 **Ford's Quality Transformation**: Ford's market share increased in the 1980s due to a focus on quality, which was influenced by Deming's principles, leading to a significant turnaround in the company's fortunes.
• 🌐 **Continuous Improvement vs. Good Enough**: Deming advocated for continuous improvement rather than settling for a 'good enough' approach, which was the standard in American and European industries at the time.
• 🤝 **Collaboration and Partnership**: Ford's partnership with Mazda and the building of its first front-wheel drive car for America exemplified the benefits of collaboration and the application of Deming's principles.
• 📊 **The Superiority of Tight Tolerances**: The Japanese approach to manufacturing, with its focus on tight tolerances and high-quality components, was a key factor in the superior performance of their products.
• 📝 **Deming's 14 Points**: Deming's philosophy is encapsulated in his 14 points, which include the importance of constancy of purpose, improvement, and a systems view of production, among others.

Q & A

Why was W. Edwards Deming highly regarded in Japan?

W. Edwards Deming was highly regarded in Japan because of his teachings on quality and continuous improvement, which resonated with Japanese companies. His impact was so significant that an award was named after him, known as the Deming Prize.

What was the initial attitude of American industry towards statistical quality control after World War II?

After World War II, American industry did not prioritize statistical quality control. With the U.S. as the world's leading provider, even with adequate or questionable quality, there was no competition, leading to a neglect of Deming's principles.

How did Dr. Deming's philosophy differ from the prevalent American business practices of the time?

Dr. Deming's philosophy emphasized continuous improvement and respect for the human element in business management. This differed from the American practices which were more focused on meeting minimum standards and did not prioritize ongoing quality improvement.

What was the critical question posed by the 90-minute program that led to the second Deming revolution?

The critical question was 'why was America losing out to Japan?' This question, along with Dr. Deming's appearance on the program, sparked renewed interest in his teachings and quality management.

What was Dr. Deming's stance on quick fixes in business management?

Dr. Deming was against the idea of quick fixes in business management. He believed that quality is a way of thinking that requires a drastic change in how we think about everything we do and live, which cannot be achieved overnight.

How did Ford's adoption of Dr. Deming's principles affect their market share?

Ford's adoption of Dr. Deming's principles led to a significant increase in their market share during the 1980s. In 1988, they overtook General Motors, and Don Peterson, who credited the success to the quality transformation prompted by Dr. Deming, was voted the country's most effective leader.

What was the reason behind the noise and stiffness of the American-made transmissions compared to the Japanese ones in Ford's first front-wheel drive car?

The American-made transmissions were noisier and stiffer because they operated within a wider range of tolerance compared to the Japanese ones. The Japanese transmissions were made with greater precision and attention to quality, which resulted in superior performance.

What was the significance of the Deming Prize being won by an American company based in Miami in 1985?

The win marked the first time a company outside of Japan received the Deming Prize, signifying the global recognition and adoption of Dr. Deming's quality management principles.

What were some of the contentious ideas proposed by Dr. Deming in his 14 points of management philosophy?

One of the contentious ideas proposed by Dr. Deming was the scrapping of performance-related pay, which went against common business practices that linked compensation to individual performance metrics.

Why were American managers initially reluctant to adopt Dr. Deming's principles?

American managers were reluctant to adopt Dr. Deming's principles because they involved a significant change from established practices and required a long-term commitment to continuous improvement. There was also a tendency to seek quick fixes and to revert to past strategies that had worked in previous situations.

How did the perception of Dr. Deming change in the United States following his appearance on American television?

Following his appearance, Dr. Deming's phone began to ring non-stop as company presidents and others sought his advice. His teachings on quality management became widely recognized and sought after, leading to a resurgence in his influence and the adoption of his methods in American industry.

Outlines

00:00

🏆 The Influence of Deming's Philosophy in Japan

The first paragraph discusses the profound respect W. Edwards Deming received in Japan, where his teachings on quality and continuous improvement are highly regarded. Japanese companies aim to achieve the Deming Prize, a prestigious award named in his honor. Despite the war's end and America's industrial dominance, Deming's focus on quality control was overlooked in favor of quantity. However, his insights into the fallacy of American industry's success and the importance of management skills over mere figures were eventually recognized. His philosophy emphasizes the immeasurable benefits of training and the need for a theoretical approach to business. Deming's ideas gained traction in the United States after a television program highlighted America's industrial shortcomings compared to Japan. His message of respect for individuals and their role in management principles resonated with many, leading to a second 'Deming revolution.'

05:01

🚗 Ford's Quality Transformation Inspired by Deming

The second paragraph focuses on Ford's adoption of Deming's principles, which led to a significant improvement in quality and a subsequent increase in market share during the 1980s. Ford, in partnership with Mazda, was building its first front-wheel drive car, and engineers discovered that the Japanese transmissions were superior due to their narrower tolerances and meticulous craftsmanship. This attention to detail and commitment to continuous improvement resulted in better performance for Ford vehicles. Don Peterson, a key figure at Ford, credits Deming's philosophy for the company's success in the 1980s. The paragraph also touches on the broader trend of total quality management and the various schemes and books that emerged, contrasting them with Deming's belief in a holistic and long-term approach to quality. Deming's 14 points, which include controversial ideas like the elimination of performance-related pay, are highlighted as a comprehensive guide to his philosophy. The paragraph concludes with the recognition of an American company based in Miami as the first to win the Deming Prize outside Japan.

Keywords

💡W. Edwards Deming

W. Edwards Deming was an American engineer, statistician, and professor known for his work in quality control and statistical methodology. In the video, he is highly regarded in Japan for his teachings on quality and continuous improvement, which led to the establishment of the Deming Prize. His philosophy is central to the theme of the video, which discusses the impact of his ideas on Japanese and American industries.

💡Deming Prize

The Deming Prize is an award named after W. Edwards Deming that is given to organizations and individuals in Japan who have demonstrated excellence in quality control and continuous improvement. It symbolizes one of the highest honors a company can receive in Japan, reflecting the country's commitment to Deming's principles. The prize is mentioned as a pinnacle of achievement for companies striving for quality.

💡Continuous Improvement

Continuous improvement, often associated with the Japanese term 'Kaizen,' is a key concept in the video. It refers to the ongoing effort to enhance products, services, or processes by making incremental improvements. The video emphasizes that this philosophy, inspired by Deming's teachings, has been a driving force behind the success of Japanese companies and later influenced American industries.

💡Statistical Quality Control

Statistical quality control is a method of quality control that employs statistical methods to monitor and control a process. It is mentioned in the video as being initially overlooked in post-war America due to the high demand for goods. However, it became a critical component of the quality revolution that Dr. Deming introduced, which helped companies like Ford to improve their manufacturing processes.

💡Quality Management

Quality management is the systematic process of aligning a company's goals with its production processes to ensure the production of high-quality goods or services. The video discusses how the adoption of quality management principles, as advocated by Deming, led to a significant turnaround in American industries, particularly in the automotive sector.

💡Japanese Competition

The term 'Japanese competition' in the video refers to the impact of Japanese companies on the global market, particularly in the automotive industry. Their focus on quality and continuous improvement allowed them to gain a competitive edge, which forced American companies to reevaluate their own quality standards and production practices.

💡American Industry

American industry, as discussed in the video, initially enjoyed a post-war boom that led to a neglect of quality standards. However, with the rise of Japanese competition and the teachings of W. Edwards Deming, there was a shift towards embracing quality management and continuous improvement. This change was pivotal for companies like Ford, which managed to regain market share.

💡Total Quality Management (TQM)

Total Quality Management (TQM) is a management approach that emphasizes the importance of quality in all organizational functions. The video highlights the rise of TQM as a popular management philosophy in the 1980s, with many companies seeking to implement its principles to improve their competitiveness. TQM is closely associated with Deming's philosophy and is a key theme in the video.

💡Respect for People

Respect for people is a fundamental principle in Deming's management philosophy. It emphasizes the importance of recognizing the innate talent and skill of workers and creating an environment where they can contribute effectively to the organization's goals. The video illustrates how this principle resonated with American managers and contributed to the success of companies like Ford.

💡Performance-Related Pay

Performance-related pay is a compensation system where employees are paid based on their individual performance or the performance of their business unit. Deming was critical of this approach, advocating instead for a system that focuses on collective improvement and intrinsic motivation. The video discusses this contentious idea as part of Deming's 14 points, which challenged conventional management practices.

💡Quality Transformation

Quality transformation refers to the process of fundamentally changing an organization's approach to quality, often through the adoption of new philosophies, practices, or systems. The video describes how Ford underwent a quality transformation in the 1980s, which was credited to the influence of Deming's teachings and which resulted in significant market share gains.

Highlights

W. Edwards Deming was highly respected in Japan, to the extent that an award was named after him.

Japanese companies follow Deming's teachings, which emphasize quality and continuous improvement.

The Deming Prize is one of the highest honors a company can receive in Japan.

American industry post-World War II was dominant but Deming identified a fallacy in its success being attributed to management skills rather than the war's aftermath.

Deming warned against the reliance on figures alone, advocating for the use of theory and understanding.

American television brought attention to Deming's teachings, leading to a second Deming revolution.

Deming's philosophy was that quality improvement should not involve separating good from bad products, but rather striving for continuous improvement.

After appearing on TV, Deming received numerous calls from company presidents wanting to speak with him.

Deming's management principles put a strong emphasis on respect for the human being and their inherent value.

Ford's market share slipped due to Japanese competition, but they attributed their recovery to Deming's principles of continuous quality improvement.

The superior quality of Japanese transmissions compared to American ones was attributed to a narrower range of tolerance and continuous improvement philosophy.

Ford's success in the 1980s was credited to the quality transformation prompted by Deming's teachings.

Deming was known for his 14 points summarizing his beliefs, which included contentious ideas like the scrapping of performance-related pay.

Deming emphasized that quality is a way of thinking and a drastic change in how we approach everything, which cannot be achieved overnight.

American managers were often reluctant to change, preferring to revert to past strategies that no longer worked in the face of Japanese competition.

Deming's teachings gained a near-religious reverence in America, with many attending his seminars.

An American company based in Miami became the first outside Japan to win the Deming Prize in 1985.

Transcripts

Deming was so highly thought of in Japan

that they named an award after him and

his teachings Japanese companies strive

for quality and continuous improvement

and one of the highest honors they can

receive is the Deming prize money

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oh no han dicho ginetto hottest air

katana day kiddo no days oh no Andy no

sorrow but appstats not sayin what's

good turkey me techie us tominaga

inna sango's on Dino dem English are to

the Tokyo bar aroma notice I got the

very first town you got a hearse for

shifter on a Wallace moving been around

I mean a 389 all super to really shut up

al oh yeah but happy times were here

again with the end of the war who needed

something as dusty a statistical quality

control America didn't other economies

had been eclipsed by the war effort

American industry stood tall the world's

provider and even if the quality of

American goods was only adequate even

questionable there was nowhere else to

go

the dictums of Deming were forgotten

[Music]

dr. Deming revered in Japan returned to

Washington and a quiet suburban life the

Deming had identified a fallacy in

American industry its success was due to

the aftermath of the war not to its own

management skills

the accountants thought the figures

added up but Deming knew that the most

important quotients cannot actually be

measured

beware of figures you better know how to

use and be guided by theory for example

you do some training spend 20,000 pounds

for training and I mean training for a

school you know the cost shows on the

ledger no doubt about it there's the

amount the benefit you'll never know you

cannot measure

it was American television that suddenly

woke up to the 80 year old prophet in

their midst it was to be the second

Demming revolution you don't get ahead

by making product and then separating

the good from the bad

because wasteful waste time of man and

the paid wages waste time of machine

that there are machines it wastes

material what we need is that the 90

minute program asked a critical question

why was America losing out to Japan dr.

Deming appeared for just nine minutes at

the NY and they did it and they've done

it well now the next day Demmings phone

never stopped ringing

at last the local profit was being heard

and I couldn't quite believe that there

was this 80 year old man who was living

five miles from the white house that no

one in America had heard of I even went

to the White House and talked to Charles

Schulz who was then chairman of the

Council of Economic Advisors and I said

do you know W Edwards Deming and he said

is he Joe Deming son and I said not

unless Joe Deming is 110 years old and

he'd never heard of him the company

presidents of America were queuing up to

speak to him one in particular made

repeated calls on his time as I came to

know dr. Deming and we talked more

frequently I began to see how

fundamentally important people are in

his basic management principles time and

time again a key principle of his you

can see it starts with this respect for

the human being that he inherently has

and that resonated so well with my own

feelings that I quickly came to be very

responsive to his ideas

Ford market share had slipped as a

result of the Japanese competition

however much the Americans may have

resented the import the fact was they

were buying them peterson agreed with

Deming that the poor quality of American

cars was to blame the approach in

America at that stage and I must say

also in Europe was that if you were

within the engineers limits plus or

minus so many thousands of an inch or

whatever it is meat meat millimeters

then that's good enough quote good

enough you know the Japanese theory

which was demonstrated by this so

vividly picked up from dr. Deming was

that you should be striving for

continuous improvement in 1981 Ford in

partnership with Mazda was building its

first front-wheel drive car for America

the transmissions were being made partly

in America partly in Japan Foods

engineers couldn't understand why the

American transmissions were noisier and

stiffer than the Japanese ones until

they pulled apart some samples when we

tore the two down we found first of all

that they obviously paid great attention

to even to the appearance of or the

elegance almost to an engineer or a

manufacturer the the gears just were

beautifully made and then as we

dimension them they were operating

within a much much narrower range of

Tolerance way within the specifications

compared with the American firm and that

control and continuous improvement

toward so little variation was leading

to that transmission functioning in a

far superior way in the hands of the

customer Foods market share increase

during the 1980s in 1988 it overtook

General Motors America's top executives

voted Peterson the country's most

effective leader Don Peterson says that

Ford's success in the 80s was entirely

due to the quality transformation

prompted by dr. Deming

suddenly everyone was talking quality

the bandwagon of total quality

management was rolling fast every

management guru had a scheme and an

expensive book which properly adhered to

would lead your company to the sunny

uplands of quality and profit anything

you can say I can say faster I can say

anything dr. Deming is the first person

to tell you there is no quick fix I

think there is no instant pudding is the

way he puts it people want a recipe and

quality is a way of thinking it's a

drastic change in and how we think about

everything we do and even in how we live

and you can't do that overnight and

American managers are very reluctant to

change because when you get in a tight

fix you always want to go back and do

what worked in the past well it won't

work anymore because the Japanese and

people who are following them are doing

things better with dr. Demings belated

recognition in his own country came a

reverence that borders on the religious

the Deming disciples flocked to hear his

slow mocking drawl at four-day seminars

across America over the years Deming has

summarized his beliefs in 14 points

Moses only had 10 his fundamental belief

in quality through continuous

improvement stands alongside contentious

ideas like the scrapping of

performance-related pay

I think the tragedy is people listen to

him and then it seems so hard that they

just take a little piece of it

American managers for the most part one

a Chinese menu they want to take some

from a and some from B and some from C

of the different quality philosophies

are the quality experts and it doesn't

work that way

in 1985 an American company based in

Miami became the first outside Japan to

win the Deming prize