Out of the Crisis.Org

[Louis Altazan]

Dr. W. Edwards Deming’s Fourteen points

In my experience, the basis of Dr. Deming’s work, is that improved processes produce higher quality output. Higher quality output increases production and lowers cost, by the removal of rework, obstacles to production, inspection and other non-value added steps. Central to the theory are his fourteen points.

Deming taught, the fourteen points were all necessary and not a list from which to pick and choose. The failures I have experienced others having with the philosophy are normally a result of that practice. What I present is my interpretation of these points, as I understand them.

Point One:

Create constancy of purpose for improvement of product and service

Point one sets up a basis for all of the following points. Constancy of purpose means a long-term and consistent approach to business. This is absolutely necessary to the overall success, as the principle are not a quick fix. Rather they establish the ground work for a system that greatly increases the odds of consistently better output, forever.

Everyone is familiar with short term issues. A bolt left loose, an unhappy client, low production, service bays not full, perhaps an accident in the shop. These issues require immediate attention. Yet no matter how well they are dealt with, things rarely turn out as well as if they had not occurred. Preventing these problems, requires a much longer term approach.

Preventing problems rarely seems as critical, in the short-term as dealing with the symptoms. The problems with treating symptoms are, they usually return and treating them consumes a great deal of resources. The cost of this approach can be staggering over time.

Without constancy of purpose, short-term issues will continue to side track a business. An example might be the need for a quick sale, for instance to meet a quota [short-term tactic.] This may cause a shop to accept a job it knows it is not properly equipped to handle. When the job goes bad, money is loss rather than gained. The shop is now in a worse position than before. It has also loss time that might have been spent on something profitable. Continue to repeat the cycle and results are predictable.

Without an aim, future plans and a philosophy to guide them, a business often concentrates solely on current problems. While today’s problems must be dealt with, working to remove the causes is equally important. This will involve additional work and resources to be invested. In the short-term this may seem an expense. With constancy of purpose, it is more properly seen as an investment.

An aim is the desired outcome of the business when viewed in time. The aim must be known, clearly expressed and agreed to by all involved parties. All involved parties includes but is not necessarily limited to management and employees. An aim should be short enough to be easily remembered, yet specific enough to be understood. For example, the aim of my company is “Continuing Ethical Profits.” Very short, but I think clearly understandable. To be successful, the decisions I make every day must support this long term aim.

Seen long-term, improvement of efficiency will increase profits, in an ethical manner. One example could be low production. The solution chosen will have a long-term effect. A long-term approach would involve finding the obstacles to higher production and eliminating them. This will take time, thought and effort. It may start with a fish-bone diagram of the process, PDSA cycles and SPC to chart the results. note: see More Problem Solving Tools for more details

http://www.outofthecrisis.org/forum/viewtopic.php?t=19&start=0&postdays=0&postorder=asc&highlight=

A short-term solution might be setting a quota or offering an incentive for employees to work harder. In time eliminating the obstacles produces much more work with less effort, thus lowering cost. In time, people coerced to work harder find they simply cannot work any harder, even for more money. Two methods, two outcomes, one short-term and one long-term.

An oversimplified parallel might be a tool that is used many times a day. The tool is stored in a location a great distance from where the work is done. Each time the tool is needed, the tech must stop work, walk the great distance and bring the tool back to the work. When finished he again stops, walks back to the storage place and returns the tool. This cycle repeats dozens of times a day and with each of four techs. Offering these techs a reward to work faster may have short-term results, but moving the tool would have much better results in time.

Long-term solutions may seem at first more difficult. Yet over time they prevent problems, lower cost and increase production. This is why constancy of purpose is necessary. Rather than jumping from one "silver bullet” to another, an aim is established and followed. This requires several things. First the aim must be workable; a market must exist, people and capital must be available, etc. Also required are faith and discipline. Faith that there will be a future and discipline to daily work toward it.

To me constancy of purpose means the actions of today will support the long-term plans of the future. This is why selecting a proper theory of management is imperative. Once a business culture is established, particularly with employees involved, it is extremely difficult if not impossible to change.

_________________
Louis Altazan
Owner/Manager AGCO Automotive Corporation
Baton Rouge, LA

[MattFMN]

I would add to this only that the dedication absolutely has to come from the very top (owner, board, etc). In my situation, I wanted very much to use the 14 Points and Deming's philosophy to change our repair shop's image and livelihood. Running it past the shop owner I received the "two thumbs up", but in reality, he never backed me up on its implementation. I couldn't apply the first, and arguably most important of the "points"... It was/is very frustrating to see problems, yet only be allowed to use short-term "patches" to "fix" them. The true repairs would have been initially more expensive and time consuming, yet ultimately cost saving and efficiency boosting for the problems would have been eliminated permanently. The best position to accomplish this philosophy is as an owner or manager with the backing of the owner.

What can I say? Another GREAT post, Louis! I'm so glad you started this forum! I'm very intrigued and excited to learn about Deming the man and the philosophy. Thanks so much! Later, Matt.

[Louis Altazan]

Hi Matt,

[Bud]

Aside from delegating, what about the practice of promising incentives, spiffs or bounses for improved performance?

That is an accepted way of managing, and frees the manager from the responsibility of actually understanding the business he is responsible for, and for fixing it.

We work in the most incentified industry, auto repair, that I know of.

[Louis Altazan]

Hi Bud,