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Deming's 14 Points

The 14 Points are the basis for transformation of American industry. It will not suffice merely to solve problems, big or little. Adoption and action of the 14 Points are a signal that the management intend to stay in business and aim to protect investors and jobs. Such a system formed the basis for lessons for top management in Japan in 1950 and in subsequent years.
The 14 Points apply anywhere, to small organizations as well as to large ones, to the service industry as well as to manufacturing. They apply to a division within a company.

(Excerpted from Chapter Two of OUT OF THE CRISIS by W. Edwards Deming )

  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.
  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.
  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.
  4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs
  6. Institute training on the job.
  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 overhaul as well as supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company.
  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.
  10. Eliminate slogans, exhortations, and targets for the work force 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 work force.
  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.
  12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
    b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual merit rating and of management by objective.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

Deming's Seven Deadly Diseases

The 14 points constitute Deming's theory of management. Their application has the potential to transform the traditional boss-management style into lead management. The following paragraphs describe the Seven Deadly Diseases and some obstacles (Fellers, 1992; Crawford, 1993):

  1. Lack of constancy of purpose- If constancy of purpose is essential for a company to stay in business, its absence means devastation. A company without constancy of purpose does not think beyond quarterly profits and has no long-range plan to survive. Deming advocates protecting investment by working continually towards the improvement that will bring the customer back again and again.
  2. Emphasis on short-term profits- Deming says that the pursuit of quarterly dividends and short term profits defeats constancy of purpose and long-term growth.
  3. Evaluation of performance, merit rating, or annual review- Deming reports that many companies and government agencies in the United States have systems in which employees receive annual ratings from their superiors. The result is people working for themselves, not for the company. Rewards and punishments do not motivate people to do their best; in fact, they do exactly the opposite, and pride in workmanship is lost. Managers, in effect, are managers of defects, and the organization becomes the loser.
  4. Mobility of top management- Deming observes that it is difficult for workers to remain committed to policy or achieve long-term improvement when they know that their manager's tenure is likely to be short. The job of management is inseparable from the welfare of the company. Workers become disillusioned when forced to endure a succession of new managers and new programs for improvement. If individuals are to work jointly toward a common end, they require time to build trust and synergy. Teamwork-along with team effectiveness- develops over time.
  5. Management based on visible figures alone- Deming believes that a company cannot claim success on visible figures alone. The most important figures needed for management are unknown, and they must be taken into account. For example, how does one quantify a happy customer's multiplying effect on sales--or the opposite effect from an unhappy customer? He warns that the potential gains from the application of his methods sometimes cannot be quantified in terms of dollars.
  6. Excessive medical costs- According to Deming, for companies that provide health insurance, medical costs represent the largest single expenditure. For example, medical costs have a multiplier effect for any company because they are embedded in the costs of the products and services of every other firm with which it does business.
  7. Excessive costs of warranty, fueled by lawyers who work on contingency- Deming calls the United States the most litigious country in the world. Fear of being sued raise costs. Liability insurance costs and legal fees cost both the company and the consumer because the business build these costs into the prices of their products and services.