Deming’s 14 points (and 5 (7) diseases to avoid) which made Japanese industry the worlds leaders.

As discussed in the previous entry, W. Edwards Deming, the management visionary, is credited with turning the Japanese management model upside down and resulted in the Japanese developing some of the most successful industrial giants in the world, following his guidelines.

A number of corporations in the USA have  also followed his lead and are now amongst some of the most profitable well run corporations in America.

Here are the 14 points, and the 5 (7) diseases to avoid, that are the heart and soul of the Deming management method. Read, learn and do, We are all way behind and need to catch up.

Recall that the keystone of the Deming’s management method is all about constant quality improvement which yields lower cost, lower pricing and better products as well as happier long term employees and long term business success.

These are the principles which must be followed to yield the results.

1. Create constancy of purpose for improvement of product or service. Rather then just making money  the        goal must be adjusted to achieve long term business success, creating more jobs through innovation            and constant improvement.

2. Adopt a new philosophy. Americans are too accepting of poor quality, we must reject mistakes and low         quality as being unacceptable low standards.

3. Cease dependence on mass inspection. Quality comes not from inspection and rejection but with                 improved quality production. Eliminating the cause of defects, is far more important then eliminating the     defects, once made.

4. End the practice of dong business with suppliers based on price alone. Its quality and a long term                 relationship not price alone that counts.

5. Improve constantly and forever the production and service system, this is not a one time goal.                       Management must constantly look for ways to reduce waste and improve quality.

6. Institute constant training. Teach employees how to do their job well.

7. Institute real leadership. The job of a supervisor is to lead, helping people do a better job.

8. Eliminate fear. Employees are afraid to ask basic and important questions for fear of being wrong or             revealing that they do not understand the process or procedures so they perform poorly, rather then ask.

9. Break down barriers between staff areas, competing goals that are in conflict, not working as a team             as opposed to solving problems together. They should all be working towards the same goal…

10. Eliminate slogans.

11. Eliminate numerical quotas. They take into account only numbers not quality, a guaranty of inefficiency         and high cost.

12. Remove barriers to pride in workmanship. People want to do a good job, and are frustrated when they         cannot, often misguided supervisors, faulty equipment, shoddy materials, stand in the way preventing           success. Eliminate these barriers.

13. Institute education and retraining to change the corporate culture and support the changes described.

14. Take action to accomplish the transformation. Everyone must be on board, management and                         employees, to successfully institute the changes discussed above, neither management nor employees         can do it alone without each others support and commitment.

The five diseases:

1. Lack of long range planning, breeds insecurity.

2. Emphasis on short term profits, undermines quality and productivity.

3. Evaluation by performance, merit ratings, or by an annual review of performance. These are devastating,       as teamwork is destroyed, rivalry is nurtured, performance ratings build fear, and leave people bitter             despondent and beaten.

4. Mobility of management, job hopping managers cannot embrace long term goals and cannot implement       the changes required if they are hopping from company to company.

5. Running a company on visible figures alone. The most important figures are unknown and unknowable,       like the value of a happy customer.

The remaining two diseases to avoid, are specific issues that are unique to America and impossible for the business owner to avoid in any way, this simply is what it is, an unavoidable problem that wil require solutions from others.They are:

1. The unusually high cost of medical care. It is sapping far to much of our revenue out of growth and development and quality of living. It is counter productive to long term success and thus a real issue.

2. The unusually high cost of litigation, law suits and liability issues however resolved. This too is particularly American and is a real barrier to growth and development.

These are unavoidable…in America.

These are all huge concepts that require intensive review, discussion, understanding and yes deep systemic change in the heart and soul of our business leaders, managers and employees as we have all been doing it the wrong way for many decades and the bad habits are now deeply ingrained in our corporate culture.

We as small business owners have the opportunity to change directions and recast the mold.

Because we are small, we can make changes faster, fewer people are involved and communicating and implementing the changes described are therefore easier to accomplish.

However we must not underestimate the enormous difficulty in successfully implementing such radical change, it will take work and commitment and possibly a longer while then expected, but it is worth it as this model will work far better then the models we are following now.

America must change from believing that it can reduce costs and thus increase profits by cheapening the process as opposed to improving the quality…it seems as though we are doing it backwards now and must turn our businesses upside down to achieve the greatness we once had.

See previous blog entry on Deming’s most important strategy of all. Scroll down its the last entry.

Much of the materials captured here are from the book called The Deming Management Method by Mary Walton. Buy it, read it, study it, do it. Get the point.