Escolar Documentos
Profissional Documentos
Cultura Documentos
Michel Baudin
ISBN 978-0-9664186-0-6
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . i
• Mark Barchenko,
• Sal Bocchino,
• Michael Bremer,
• Bill Bryant,
• Stephen Dunn,
• Wayne G. Fisher,
• Jesse Gentile,
• Praveen Gupta,
• Dr. Mirmohamad Rouzbeh,
• Chris Stergiou,
• Gregg Stocker
Rereading Deming’s 14
Points
Deming’s 14 points
Deming’s 14 points are the best known legacy of his 1982 book
Out of the Crisis. Which crisis? The title begs the question, but the
answer is elusive. When the book first came out, in 1982, the US
was in a recession, and some industries, like steel, shipbuilding, cars,
consumer electronics, and semiconductors, were feeling the sting of
Japanese competition, but the appreciation that there was more to
it than imitation, low wages and hard work was slow in coming.
Based on the copyright date, I thought the book was about how to
get out of that recession, but the title Out of the Crisis was only
given to it in 1986, when the country was booming. The original,
1982 title was Quality, Productivity, and Competitive Position, with
no reference to a crisis. So the question remains.
The book now ranks about 20,000-th among books on Amazon,
which is quite an achievement for a 30-year old technical book. 30
Rereading Deming’s 14 Points iii
From it, you would not guess that the company makes cars and
trucks. The statement reads like keywords strung together. The only
specific thing it says is that the company exists to make money for
stock-holders. Ford’s is equally cagey:
⁵http://michelbaudin.com/2012/08/14/metrics-in-lean-alternatives-to-rank-and-yank-
in-evaluating-people/
⁶http://en.wikipedia.org/wiki/Hoshin_Kanri
Point 1: Create constancy of purpose x
Neither a cheese maker nor a car company could say that. From
that one sentence, we know which market the company serves and
what it provides. To managers inside the company, it provides a
clear direction on what to pursue and what to stay away from.
This is a company founded in 1926 with over $39B in sales in 2011. 25
years ago, it could not have made such a clear statement of purpose,
because it had diversified into unrelated areas: besides providing
oilfield services, it was making household meters for electricity,
water and gas, smart cards, and semiconductor chips. It has since
then sold off all these businesses and refocused on the activity for
which it had been founded.
Google’s mission statement is also clear and specific:
This could have been said, with different meanings, at any time in
the past 200 years. It could be said today, about a “new philosophy”
that would not be the one Deming was referring to 30 years ago.
What was new in 1982 or even 1986 may be long in the tooth in 2012.
Also, is there such a thing as “Western management” as a common
approach spanning the Americas and Western Europe?
In the elaboration on this point, Deming asserts “We are in a new
economic age, created by Japan.” Deming’s 2nd point could be
Point 2: Adopt the new philosophy… xiii
Louie de Palma
Point 2: Adopt the new philosophy… xvii
Let us study TPS for what it really is: the best known way to make
cars. And, if Mark Graban can learn from it and improve hospitals,
it’s wonderful. But let us not go to a car maker for philosophy. It’s
the wrong shop.
Saying it’s the best known way to make cars is not talking it down;
it’s what drew me to it. Philosophy is also a wonderful thing, but
corporate philosophy is to philosophy as advertising is to poetry.
If you parse it, it should be to understand the image management
wants to project, not what the company does.
There is a Japanese word for philosophy (tetsugaku, 哲学). Googling
“toyota tetsugaku” yields a single occurrence on the Toyota website,
in one paragraph about “Business strategy” (hoshin), which trans-
lates as follows:
I have the greatest respect for TPS, and have experienced its
adaptability to industries ranging from making frozen foods to
computers and aerospace. And I understand that you can’t go to
a hospital and tell administrators, doctors, and nurses that you are
going to help them with a method for making cars. You not only
have to adapt it, you must also present it in such a way that they
will listen. For 25 years, the word “Lean” has been used for this
purpose. It has also been abused, to leverage the respect inspired by
TPS in order to promote unrelated ideas.
We also need to be careful about references to DNA in this context.
I believe it started with Spear and Bowen Harvard Business Review
Article Decoding the DNA of the Toyota Production System⁷.
Culture is nurture; DNA, nature. Your culture is the way your
family, school, and society molded you; your DNA, the genetic
program that made you.
Generally, we should treat national culture as irrelevant to manu-
facturing. If Japanese business leaders in the late 19th and early 20th
century had considered it relevant, they would have decided that
manufacturing was a product of European and American culture
that could not be transplanted to Japan.
About housekeeping habits specifically, I remember being im-
pressed, while walking the streets of Rotterdam at night, by houses
with the drapes pulled and the lights on to let passers-by admire
spotless living rooms. What we saw in factories in the same country,
however, told us that the cultural obsession with neatness in daily
life did not carry over to the production shop floor.
DNA is even less relevant. In every society, there are misguided
individuals who believe that having been born into a particular
⁷http://hbr.org/1999/09/decoding-the-dna-of-the-toyota-production-system/ar/1
Point 2: Adopt the new philosophy… xix
In_ Out of the Crisis_, the 14 points are the closest there is to the
statement of a philosophy. Therefore, what this point essentially
says is that they the other points should be adopted.
Point 3: Cease dependence
on inspection for quality
Deming’s 3rd point is the first to mention quality, and it is specific,
even if its implementation is sometimes a tall order. Its complete
statement is as follows:
The idea that quality should be built into the design of the prod-
ucts and into the processes to manufacture them has come to be
generally accepted in the past 30 years, and implemented in many
industries. You never hear anyone arguing against it. At the same
time, final inspection and test has never completely disappeared,
even in the car industry.
Engines, for example, are all tested before moving on to assembly,
even at the best manufacturers, and body paint is visually inspected
by people. In the details he gives about this point, Deming acknowl-
edges that there are exceptions where no one knows how to build
quality into the process.
In particular, he mentions integrated circuits. It is still true in 2014,
and the economic importance of this “exception” has grown in the
past 30 years. There are also other, older technology products for
which there is no alternative to sorting the output. Lead shot, for
example, is produced by pouring molten lead into a sieve, collecting
the solidified drops, sorting the ones that are sufficiently round
based on their ability to roll down chutes, and recycling the others.
Point 3: Cease dependence on inspection for quality xxi
Process Capability
Problem Detection
Mistake-Proofing