In recent weeks we have looked at various elements of a business operating system (BOS) and the benefits of using lean manufacturing to support the BOS. Our focus this week will be the work of W. Edwards Deming. His vision changed our view of the role of management to one where the workforce could experience joy in both learnings and work while pursuing continuous improvement of the organization.
"The worker is not the problem. The problem is at the top! Management!" ― W. Edwards Deming
Dr. W. Edwards Deming developed 14 Points for Management, which are as relevant and essential to creating a systems perspective today as when he designed them in his 1982 book Out of Crisis. Deming's comprehensive theory of management is a model of wisdom and simplicity that can be fully explained in 14 points (Deming's points in italics):
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. Managers play an essential role in creating an environment where employees receive recognition and reward for improving the organization's products and services.
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. There continues to be a need for management to awaken to the challenges the manufacturing industry faces. In particular, what changes are necessary to close the increasing employee gap between industry needs and those interested in working in the industry.
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. The robust design of a product and the processes to produce it create more significant potential for defect-free results.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. I have been the unfortunate recipient of a lack of understanding across the company of the total cost of manufacturing a product. Inferior raw castings led to significant difficulty processing an engine mount. Some were soft, others hard, and worse yet, both hard and soft. Production costs exceeded the small savings of the raw component purchase price.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. We must choose to accept the need to continually improve in all aspects of manufacturing if there is a desire to be an ongoing viable entity.
6. Institute training on the job. I once had a VP of Manufacturing tell me that we did not train our employees because when doing so in the past, they left for better jobs. The concept of keeping untrained workers did not seem to be an appropriate reaction. The company later went bankrupt, so it was one of many issues where the lack of training at all levels led to its demise.
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 an overhaul, as well as supervision of production workers. There continues to be a need for more vital leadership across the manufacturing industry. The manufacturing response to societal changes is lagging, partly because our higher education institutions need to prepare our future leaders better.
8. Drive out fear, so that everyone may work effectively for the company. Creating an appropriate balance where people do not fear repercussions for mistakes but understand the need to be accountable for proper actions is one of the several essential components in creating a thriving continuous improvement culture.
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. A key to breaking down silos is creating a compelling organizational purpose where the workforce puts aside individual or department goals for the company's betterment.
10. Eliminate slogans, exhortations, and targets for the workforce 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 workforce. Our work as leaders and managers should be what inspires the workforce, not slogans like "Our employees are our greatest asset." A better approach is appropriate rewards and recognition for a job well done.
11. a) Eliminate work standards (quotas) on the factory floor. Substitute leadership. b) Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership. My greatest success as a plant manager was when I focused on what the workers were doing well. It was difficult when I arrived at the company as there were many issues. However, it became easier each week, and in six months, we significantly improved productivity and decreased quality issues and downtime.
12. a) Remove barriers that rob the hourly paid worker of his right to pride in workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. b) Remove barriers that rob people in management and engineering of their right to pride in workmanship. This means, inter alia, abolishment of the annual or merit rating and management by objective. A continuing theme is that we should provide rewards and recognition for the results we look to achieve. When we cultivate a culture of quality pride, the numbers will follow.
13. Institute a vigorous program of education and self-improvement. All employees at all levels of the organization should have annual improvement plans to support the organization's need for continuous improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. Every role in an organization is essential and should be seen as crucial. We must value what each member of the company contributes in the pursuit of excellence.
He further articulated a System of Profound Knowledge in the 1980s and 1990s, resulting in a highly integrated framework for leaders who can use thought and action to transform an organization.
The successful integration of Deming's 14 Principles of Management enhances the potential for a thriving and systematic organization. While he may not have had humanist commitments in mind when developing his work, they align with his approach to realizing an ideal manufacturing state. Therefore, the Deming 14 Points for Management should be integral in developing your business operating system.
Those interested in learning more about the value of adopting Deming's 14 Principles of Management can watch a video from the Deming Institute. There is an emphasis on the need to fully embrace the mindset of developing processes where employees can succeed. To support this, supervision should instead shift to a focus on leadership.
I am always a fan of simplicity in explaining the complex. Deming developed 14 points that are important as stand-alone management principles. The beauty is that every one of them is integral to the others. While an individual could benefit from adopting them as individual concepts, the astute leader will see the need to fully implement them as a complete package.
Next week's blog will look at the benefits of adopting circular design into the humanist manufacturing framework.
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