Deming

Deming

After World War II eminent statisticians like Deming, Juran, and Ishikawa came up with some new and unique quality
management concepts. The shift in the management's perspective to quality too can be traced back to this period.

Concept > Introduction

Learning is not compulsory...neither is survival.

Dr.W.Edwards Deming.

Quality is no longer an option, but a positive requirement for any business to survive today. Quality now is not just about
meeting certain specifications but implies meeting and exceeding customer expectations.

After World War II eminent statisticians like Deming, Juran, and Ishikawa came up with some new and unique quality
management concepts. The shift in the management’s perspective to quality too can be traced back to this period.

Edwards Deming is famous for his stupendous role in the Japanese quality revolution. He successfully taught the Japanese
the importance of applying statistics to improve the quality of products.

During his visit to Japan in the early 1950’s, Deming stressed on a culture where continuous improvement is firmly rooted
in all activities of the organisation. He considered the entire production activity a system involving the suppliers and the
end customers. According to Deming an organisation, must manufacture its products according to customers’
requirements. He also highlighted the need to partner with suppliers to create quality products economically.

In a very short time the Japanese became world leaders in manufacturing. There was an incredible growth in their exports.
Japanese goods, once considered worthless were most sought after, the world over.

Deming’s teachings were the seeds for the industrial revolution in Japan. The Japanese established the Deming’s prize in
1950 to express their gratitude to Deming.

Even as Deming’s teachings revolutionised the Japanese industry, he was ironically unknown in his own country, in
America. It was not until the NBC news channel aired a programme in 1980, titled ‘If Japan can…why can’t we?’ that the
US woke up to Deming and his teachings. This documentary proved an eye opener for the American manufacturing
industry. The US actually got to why Japan was much ahead of them in superior quality standards.

Since then Deming’s ideas started gaining acceptance in American businesses and the world at large.

Deming’s teachings are detailed in his famous books “Out of the Crisis” and “The New Economics for Industry,
Government, Education”.

His key teachings can be summarised as under:

• Deming’s 14 Points to manage an organisation.

• The Obstacles and ‘The Seven Deadly Diseases’ against Quality.
• The PDCA Cycle Of Continuous Improvement.
• The Theory Of Profound Knowledge.
Continue the tour:
Deming's 14 Points

Concept > Deming’s 14 points

Deming believed that quality could be achieved only through an organisation wide transformation. Management plays a
very crucial role in this. Deming’s 14 points are hence valuable guidelines for any management seeking to bring about a
transformation in their organisation. The 14 points he enunciated are:

1. Create constancy of purpose toward improvement of product and service, with the aim to become
competitive, stay in business, and to provide jobs.
According to Deming, a customer-oriented approach is the key to success. Companies will have to fulfil customer needs
and expectations to remain competitive. This requires an honest assessment of the company’s processes, products and
market. It also demands a willingness to change. Continuous improvement should be the only constant in any
organisation.

Companies need to plan for the long term and adjust all their processes and functions towards fulfilment of these long-
term goals. Short-term solutions often have undesirable effects on the achievement of long-term goals.

2. Adopt a new philosophy. We are in a new economic age. Western management must awaken to the
challenge, learn their responsibilities and take on leadership for change.
After the Second World War, United States was the only country that had both the resources and manpower to dominate
the world in manufacturing. But US companies ignored the fundamentals of manufacturing and concentrated more on
promotion and marketing. Deming had meanwhile foreseen this and presented the need for transformation in the western
style of management. He emphasised the need for focus on quality improvement and overall change in the western
strategy.

3. Cease reliance on mass inspection to achieve quality. Eliminate the need for large-scale inspection by
building quality into the process itself.
Deming stressed the futility of the system of inspection. According to him, inspection of the finished product happens very
late and is futile. The company ends up paying both for the production of defective parts and for their modification.

Quote: “Quality comes not from inspection but from the improvement of the process”(Deming 1986).

According to Deming, inspection should be a method where the workers assess the quality of their work at the process
level. This helps shrink variation and minimise end product inspection.

4. End the practice of awarding business on the basis of price tags. Instead, minimise total cost. Move toward
a single supplier for any one item, on a long-term relationship of loyalty and trust.
Today suppliers play a vital role in the quality of the end product. Consistently high quality products are only possible
through a committed long term working relationship with a few trusted suppliers. Hence, companies should move towards
long-term relationships with a few crucial and trusted suppliers.

5. Improve the system of production and service constantly, to improve quality and productivity, and thus
constantly decrease costs.
Deming suggested the use of Shewhart’s cycle to design and continuously improve products or processes.

This cycle is widely known as PDCA cycle (Plan-Do-Check-Act). The PDCA cycle can be used to identify problems in a
product or process and work towards their continuous improvement. It can also be applied to incorporate customer needs
and wants into new products, thereby providing a customer centred approach.

6. Establish on-the-job training.

In most companies on-the-job training is either not sufficient or is conducted by a person who is himself not fully trained.
This results in the propagation of faulty practices. Providing quality training should be the first step any company takes
towards improving quality.

Training in monitoring processes should not be limited to engineers but should extend to all frontline workers. It is they
who first check whether the processes are operating within controls. Hence they too should be given adequate training to
know about ways to maintain a process within acceptable limits.

7. Institute leadership. Supervision should aim to help people and machines and gadgets to perform better.
Management supervision as well as supervision of production workers is in need of overhaul.
According to Deming the management should act like a mentor rather than a faultfinder. Instead of judging workers based
on their performance, managers should look how they can improve the system to help workers give their best. Managers
should strive to create an environment of trust and encouragement such that workers experience a sense of pride in their
work.

8. Drive out fear, so everyone can work effectively for the company.
People are at their best when they feel secure enough to ask questions or share ideas. Both productivity and quality are
often harmed in the presence of fear. Normally, workers who fear their bosses seek to meet the minimal expected
standards rather than striving to give their best. Thus quality is neglected.

An atmosphere of fear in a company neither promotes respect for the management nor an improvement of quality.

9. Break down barriers between departments. People in research, design, sales, and production must work as
a Team, to foresee problems of production and during end use that may be encountered with the product or
service.
Let us consider a very department centred company. The design department in this company develops a prototype based
on a new design. The prototype is handed to the sales department, which in turn demonstrates it to the customers and
receives advance orders from them. However, the manufacturing department is unable to produce the product
economically and in time. This is because the new design was not made keeping ease of manufacturability in mind. The
result is delay and poor quality of the final product. Apart from loss of sales the company good will too is destroyed.

Organisations require a cross-functional teamwork based culture in order to improve performance. Called QC (Quality
circles) these teams consist of personnel from design, engineering, production, finance and sales departments.

Cross-functional teams develop an overall perspective of issues. They are thus able to arrive at viable and economical
solutions.

10. Eliminate slogans, exhortation and targets for the work force asking for zero defects and new levels of
productivity. Such exhortations only create adversarial relationships, since the major cause of low quality and
productivity is the system and thus lies beyond the power of the work force.
Quality slogans and banners aim at motivating workers to improve quality. But according to Deming these are directed at
the wrong people. Workers have only as little as 6% in their hands to enhance quality. About 94% of the possible
improvements are dependent on the ‘system’.

The power to effect improvement in a ‘system’ lies only with the management. Management should hence seek ways to
improve the ‘system’ instead of holding the workers responsible for poor quality. According to Deming the posters or
slogans put up by management only lead to frustration within the workforce. It reveals that the management is ignorant of
the real causes of poor quality.

11. Eliminate work standards (quotas) on the factory floor; eliminate management by objectives; and,
eliminate management by numbers and numerical goals. Substitute this by leadership.
According to Deming, setting individual production targets may prove counterproductive to quality. Workers striving to
achieve their production targets often neglect the finer aspects of quality.

Long-term goals can only be met by improving the system. Hence, Deming suggested improving the system rather than
setting targets and driving workers to achieve those targets.

12. Remove barriers that rob employees, management, and engineering of their right to pride of
workmanship. This means, inter alia, abolishment of the annual review or merit rating and management by
objectives. The responsibility of supervisors must be changed from mere numbers to quality.
According to Deming the concept of ranking and performance evaluation is unjust. Ranking generates competition amongst
workers. Rather than motivate, it demoralises employees. Deming believed that it was the system that needed to be
continuously reviewed and improved.

13. Institute a vigorous programme of education and self-improvement.

Training helps the worker improve his skills for the present job. Education on the other hand focuses on the future.
Managements must thus provide employees education programmes such that they can adapt to the future requirements in
their job. Education helps an employee to contribute to his workplace in a more intelligent way.

14. Put everybody in the company to work to accomplish transformation. Transformation is everybody's job.
Transformation can only be achieved if everyone in the company is involved starting from the boardroom to the front line
worker. This is because every activity in the company is important. Management should effectively communicate and
convey the role each worker can play in process improvement. According to Deming, Quality can be improved only when
everyone in the company rightly interprets these 14 points and successfully implements them to achieve transformation.

Techniques and Methods > Deming’s Cycle

According to Edwards Deming, the success of an organisation lies in how well it evaluates its present products, processes
and markets in the light of customer needs.

Quality is about providing the customer with what he wants. With customer needs changing, an organisation should also
be willing to change. An organisation needs to equip itself with the necessary techniques for making continuous
improvement at the work place.

Deming promoted the use of PDSA cycle as a means to improve quality in an organisation. PDSA is an acronym for PLAN,
DO, STUDY and ACT.
Its origin can be traced back to the eminent statistician Walter A. Shewhart. In the 1920’s Shewhart had developed the
PLAN, DO and SEE cycle for improvement. This is often referred to as ‘the Shewhart cycle’. Edward Deming modified the
Shewhart cycle as: PLAN, DO, STUDY and ACT.

In the 1950’s, Deming taught a lot on quality improvement to the Japanese, the PDSA cycle being prominent among these.
Later the Japanese modified Deming's coinage of PLAN, DO, STUDY and ACT to the present-day, universally accepted
PDCA (Plan-Do-Check-Act) acronym for systematic improvement.

PDCA is a simple, easy-to-use and highly effective technique for continuous improvement. It can be used to manage and
improve almost anything. The PDCA cycle can be used for identifying and incorporating customer requirements in a new
product. It can also be used for making continuous improvement in an existing process or product. It is a cyclic process
because it can be repeatedly applied to the same product or process for continuous improvement.

The PDCA cycle is also known as the Deming’s Cycle or the Deming’s wheel of continuous improvement. This concept
gained prominence in most organisations worldwide after the Japanese applied it successfully to improve their products
and processes.

The four stages in the PDCA cycle:

PLAN:
This stage consists of improving a process by identifying the problems/opportunities in a product or process and coming
out with solutions.

DO:
In this stage, the solutions identified in the Plan stage are implemented on a small scale. This ensures that there is no
interruption to the routine process while the planned solutions are being implemented. It also minimises the costs of any
failures.

CHECK:
This stage consists of checking if the changes implemented on a small scale are working as expected. Any new problem
identified during this stage has to be promptly addressed.

If in the check stage the experiment is not successful, the Act stage must be skipped, and the Team must get back to the
Plan stage and collect fresh ideas to solve the problem.

ACT:
Act stage consists of expanding the scope of implementation from the small scale to the actual process. This is done only
when the trial changes applied in the DO stage prove successful.

PDCA has varied applications. It is used for:

1. Daily routine activities, for an individual or a team.

2. Problem solving.
3. Project management.
4. Continuous improvement.
5. Vendor development.
6. Human resource development.
7. Development of new products

A simple illustration of the PDCA cycle is presented here:

Consider a student X who is not satisfied with the results in the recently held examination.

The problem: Poor performance in the exams.

Cause of the problem: Time spent on study is insufficient.

Improvement to be made: Increasing the time spent on study (say from 4hrs a day to 8 hrs a day).

Testing the improvement: By rewriting the old exams.

Checking the improvement: By comparing the grades with the previous grades.

Implementing the improvement: If better grades are achieved, putting the increased time spent on studies into regular
practice. If the performance is not better, identifying causes and other solutions.

CYCLE 1

Plan:
The student X decides to put in an additional 4 hours per day in studying. He decides to spend less time with his friends,
get up early and keep awake till late night.

This he plans to do for one week and appear for the exam.

Do:
He writes an exam on an experimental basis to see whether things are going right.

Check:
He finds that he has done much better this time.

However, X has achieved this at the cost of his daily physical exercise and the time he spends with his friends. His normal
routine has been sacrificed resulting in greater stress levels.

Act:
He has to go for a more efficient improvement.

CYCLE 2

Plan:
X intends to do a part of his study while exercising on the Stairmaster. He also intends to spend some time studying with
his friends. This will not disrupt his normal routine. X sees to that he definitely puts in 4 hours of additional study per day.

Do:
He writes an exam on an experimental basis to see whether things are going right.

Check:
X finds that his performance has significantly improved. Moreover, his normal routine is not altered.

He realises that studying does not mean isolating oneself from the surroundings.

Act:
X decides to continue with the changes he made in his normal routine.
As illustrated above, the PDCA is a simple technique that every one can apply to make improvements in any sphere of
work. In fact, everybody uses the PDCA concept knowingly or unknowingly, in his or her own way. The difference is though
is in the thoroughness and consistency with which it is applied.

Tools > Deming Tools

"Price has no meaning without a measure of the quality being purchased"

Deming stressed on the importance of statistical tools to improve quality. According to him these tools help quality
practitioners better monitor, analyse and improve process performance. The use of statistical tools has an edge over the
traditional approach of inspection based quality control systems, which are expensive, inefficient and unreliable.

There is a great scope for applying statistics and statistical tools in each stage of the PDCA cycle. Deming promoted the
concept of PDSA cycle, which subsequently came to be known as the PDCA cycle or � the Deming Wheel�.

Tools that can be applied in each stage of the PDCA cycle:

PLAN:
This stage consists of improving a process by identifying the problems being faced and finding solutions.

Various tools are used during this stage. Some popular tools are

• Customer/supplier mapping.
• Flowcharting.
• Pareto Analysis.
• Brainstorming.
• Nominal Group Technique.
• Solution/Fault tree Analysis.
• Evaluation Matrix.
• Cause and Effect Diagrams.

DO:
In this stage, the solutions identified in the Plan stage are implemented on a small scale. This ensures that there is no
interruption to the routine process while the planned solutions are being implemented. It also minimises the costs of any
failures.

Various tools are used during this stage. Some popular tools are

• SMED.
• Experimental Design.
• Conflict Resolution.

CHECK:
This stage consists of checking if the changes implemented in a small scale are working as expected. Any new problem
identified during this stage is to be promptly addressed.

Various tools are used to gather inputs needed during this stage. Some popular tools are

• Data check Sheets.

• Graphical Analysis.
• Control Charts.
• Key Performance Indicators.

ACT:
This stage consists of implementing the changes throughout the process wherever required. This is done only when the
trial changes prove successful.
Various tools are used to gather inputs needed during this stage. Some popular tools are

• Process Mapping.
• Process Standardisation.
• Controlled Reference Information.
• Formal training for standard processes.

Quality Tools > Flowcharting

Flowcharting is a tool for analysing processes. It allows the team to break any process down into individual events or
activities showing the logical relationships.

Flowcharting is a simple way of creating a visual representation of sequence of activities.

Constructing flowcharts promotes better understanding of processes, which is a prerequisite for improvement.

Need for a flowchart in an organisation:

An organisation consists of many interrelated operations. These are sometimes complicated and seldom modified in
response to customer requirements, laws and regulations. Top management often make modifications in the processes
without considering the other employees. This is not conducive to the organization.

The best alternative would be to categorize the responsibilities into areas of activities and share the needs of the
organisation with the other workforce. The next step would be to prepare flowcharts of the stages in each process so
that the employees can get a clear picture of the process flow. The flowcharting technique helps one to move in the right
direction, gather critical information, and correlate various processes.

There are three types of flow charts.

• The high level flow chart.

• Matrix flow chart.
• Detailed flow chart.

High-level flow diagram visually represents the sequence of activities in a process without detailing them.

A matrix flow chart consists of relating the activities to unique entities in the organisation.

A detailed flow diagram takes into account the plausible problems in the process and the course of action to be followed
once there is a problem.

Guidelines for preparing a flowchart:

Flowcharts are generally represented using standard symbols. Some standard symbols, commonly needed for
flowcharting are:

Start or end of the program/process

Input or output command

Represents a decision point in the process. One flow line moves into this symbol and more than one flow
lines move out of this symbol on the basis of ‘yes’ or ‘no’ response.

Used it to indicate the point at which the flowchart relates with another process
 Connector or joining of two parts of a program

Magnetic Tape

Magnetic Disk

Off-page connector

Flow line.These connect two symbols in a flow chart.

Annotation

Display

Some guidelines for flowcharting:

All required aspects should be arranged in logical order while drawing an appropriate flowchart.

The flowchart should be precise and comprehensible. In a flow chart processes normally flow from left to right or top to
bottom.

Only one flow line should generate from a process symbol.

Only one arrow should go into a decision symbol, but more than one arrow, one for each solution can come out of the
decision symbol.

Only one arrow is used in symbtion with the terminal symbol.

The standard symbols should be written concisely. If necessary,the annotation symbol can be utilised to describe the
information more accurately.

If the flowchart is hard to comprehend, the connector symbols can be used to lessen the number of arrows.

Ensure that the flowchart has a start and finish.

Advantages of Flowcharts:
Flowcharts are effective in communicating the intent of a process to all the people involved.

• A problem can be evaluated in a more efficient manner with the aid of a flowchart.
• Program flowcharts can be considered as the documentation of crucial information in a logical sequence.
• Flowcharts can be referenced while evaluating a process.
• A flowchart simplifies the maintenance of the procedural steps for a process.

Disadvantages of Flowcharts:

• When the program logic is very complex the flow chart may become difficult to comprehend.
 • Any modifications in the process may require the creation of a new flow chart.
• Generating a flowchart is a tedious procedure, as flowchart symbols cannot be typed .

The figure below represents a flowchart for the sum of the first twenty-five integers. In this flow chart, the print sum is the
out put command. There are two flow lines emerging out of the decision symbol. One proceeds to the next step while the
other iterates back to the earlier steps.

Additional Reading:

1. Flowcharting symbols:
This article highlights the standard flowcharting symbols:
http://www.rcc.ryerson.ca/rta/flowchart/symbols.html

2. Flowcharting help page:

This article details the various types of flowcharts:
http://home.att.net/~dexter.a.hansen/flowchart/flowchart.htm

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Quality Tools > Pareto Chart/Pareto Analysis

Vilfredo Pareto (1848-1923) observed that 80% of the wealth in Italy was held by 20% of the population. This observation
was confirmed by Juran (1960) to be applicable in other areas as well. For instance it is often found that

• 20% of customers account for 80% of sales

• 20% of parts accounted for 80% of cost, etc.

This theory of ‘Important Few’ and ‘Trivial Many’ eventually came to be known as the Pareto Principle.

Pareto Analysis is based on the classical 80/20 rule. Let's say you have a problem with a product failure owing to several
causes. Through observation and data collection, you determine there are 10 to 12 causes. Rather than attacking the
causes randomly, a Pareto Analysis will help identify the top 2 or 3 causes that are the major contributor to the problem.
This helps to identify the causes that need to be tackled first.

The tool associated with this problem solving technique is the Pareto Diagram. It is a chart or a graph depicting each
problem along with the frequency of the occurrence. It is created as follows:

1. Create a table listing all observed causes to a problem occurring at a particular stage.
2. Identify the number of occurrences of each cause over a fixed period of time.

Say:

Cause1 115
Cause2 25
Cause3 50
Cause4 5
Cause5 5
Cause6 15

3. Arrange the causes from highest to lowest, based on the number of occurrences.
4. Add a column for the cumulative total.

CAUSE No. Of Occurrences % To TOTAL (cum %)

CAUSE 1 115 53%
CAUSE 3 50 77%
CAUSE 2 25 88%
CAUSE 6 15 95%
CAUSE 4 5 98%
CAUSE 5 5 100%

Total causes: 215

5. Notice that this gives us important information. Even though six causes have been identified, you need to resolve
causes #1 and #3 first. That is where you will get the most impact in solving the product failure problem. If you had
decided to work on problems #4 and #5 instead, your effort would hardly tackle the product failure problem. This does not
mean that you do not want to resolve the other problems. However, Pareto Analysis gives you information to prioritise
your efforts.

Additional Reading:

1. Pareto Charts: Distribution and Causal Analysis Tools:

This article provides an example for the utilisation of Pareto chart.
http://www.hanford.gov/safety/vpp/pareto.htm

Quality Tools > Brainstorming

Brainstorming is a process wherein a group of people focus on an issue/ problem and then come up with several radical
solutions. They bring out ideas as they think of them, regardless of the content of the ideas, such that each of the
participants has the opportunity to build on the ideas of others. No discussion, evaluation, or criticism of ideas is allowed
until the brainstorming session is complete. Every brainstorming session should have a facilitator assigned to record all
ideas.

An American advertising executive Alex Osborn developed this technique in the 1940s.

Types of Brainstorming:

• Individual Brainstorming: When you brainstorm on your own you do not have to worry about other people's
egos or opinions, and can therefore be creative and generate more ideas. However, the ideas you develop
individually may not be as effective since you do not have the experience of a group to help you.

• Group brainstorming: Group brainstorming can be very effective as it uses the experience and creativity of all
participants. The advantage here is that when an individual participant is saturated, another participant's
creativity and experience can take the idea to the next stage. Group brainstorming, therefore, tends to develop
ideas more in depth than individual brainstorming.

For effective brainstorming:

• Clearly define the problem to be solved, and lay out any conditions to be met.
• Encourage everyone to contribute and develop ideas, including the seemingly reserved members of the group.
• A single train of thought should not be followed for too long during a brainstorming.
• Ensure that one person documents all ideas generated during the session.

Quality tools > Nominal Group Technique (NGT) / Negative Brainstorming

In-group meetings, participants often feel that their opinions are not given due consideration.

This happens due to:

• Difficulty faced by the participants in expressing their opinions.

• The group being dominated by a few members who speak most of the time
• The meeting becomes a speaking and listening session leaving no scope for the participants to think and
generate ideas.

Nominal group technique (NGT) is a unique way of organising a meeting to make it more productive.

It establishes that individuals come out with effective ideas when left alone to think.

The participants have a group environment but the routine group-dynamics are absent. This helps the participants to
express their ideas openly without any inhibitions.

NGT has an edge over normal meetings since:

• Every individual gets an equal chance to put forward his/her ideas i.e. there is balanced participation.
• Group consensus can be reached faster.

The process consists of the following steps:

• Participants are asked to write down their ideas.

• Ideas of each participant is recorded.
• Each idea is read aloud and the participants are asked to respond.
• Each participant is then asked to write down the ideas that seem effective to him.
• The number of people who consider an idea important are recorded.
• Finally, the participants are asked to rate each idea. The cumulative rating for each idea is calculated. The idea
that gets the highest rating is selected.
Advantages:

• Enables greater idea generation and better problem analysis.

• Helps in not only identifying root causes but also in developing better solutions.
• The NGT motivates participants from diverse backgrounds to share their views openly and freely.
• Participants have a balanced participation.
• The putting forth of ideas through writing motivates even the most reserved participant to share his views.
• NGT requires only one expert moderator.

Disadvantages:

• People participating in the NGT have to be educated. They should be at least capable of writing down their views
on a piece of paper.
• The participants have to be present through out the process that might often go on for hours.
• Ideas generated may be unrealistic and hence not feasible.
• The NGT is a unique technique for simple issues but must be amalgamated with other broader techniques for
complex issues.

Additional Reading:

1. Nominal Group Technique: Purpose, process, uses and abuses

1. This article gives an elaborative explanation of Nominal Group Technique (NGT).
http://www.institute.virginia.edu/services/csa/nominal.htm

2. Nominal Group Technique flowchart

This document gives an overview of NGT in the form of a flowchart
http://www.ryerson.ca/~mjoppe/ResearchProcess/841TheNominalGroupTechnique.htm

3. Nominal Group Technique: An alternative to Brainstorming

This article emphasises on Nominal group technique as an alternative for brainstorming.
http://www.joe.org/joe/1984march/iw2.html

Quality Tools > Solution/Fault Tree Analysis

Fault tree analysis is a deductive method used to explore various causes of a problem in a process. This method is quite
useful in processes where the problem has been identified beforehand but causes have not been identified.

A fault tree makes use of symbols to specify the causes or the events that lead to the problem.

Generally logic gates are used during the analysis. A gate specifies the relation between the input and the output events of
a fault tree. The inputs are the various causes that lead to the problem. The output refers to the problem itself.

Various gates are used in the fault tree analysis, prominent ones being AND and OR gates. Sometimes the problem occurs
due to a combination of events i.e. all the events need to occur for a problem to arise. Such events are put under AND
gate. If a problem is caused due to at least one of the events identified, it is put under the OR gate.

Gate Input X Input Y Output

T T T
AND T F F
F T F
F F F

GATE Input X Input Y Output

 T T T
OR T F F
F T T
F F F

In the chart T indicates the occurrence of an event and F the non-occurrence.

The fault tree analysis therefore provides useful information regarding the means by which a failure can occur in a process.
This method is often known as the ‘top-down’ approach.

Additional Reading:

1. Fault Tree Analysis: What and when to us it?

The alternative way of constructing a fault tree is explained in this article.
http://web2.concordia.ca/Quality/tools/15fta.pdf

Quality Tools > Single Minute Exchange of Die (SMED)

A Japanese management consultant, Shigeo Shingo in 1969, originally developed SMED.

The SMED technique is by far the best method for achieving really significant reductions in set-up times. Machine setters
and operators can easily understand and apply it themselves, after just a few hours of instruction.

The SMED system is a simple but often misleading term as it can be applied to processes other than machine tools that
use a die. The focus is on reducing non-value adding set-up time like changing tools or die, clamping and unclamping work
and other such non-productive activities. This concept can be of great value in all industries. Set-up and changeover times
are broken down into the simple elements and each element is analysed to eliminate, externalise and simplify.

A set-up will normally consist of a number of separate tasks, some of which can only be carried out when the machine or
process is stopped. Others could be carried out when the machine or process is in operation.

Shingo called the former ‘internal activities’ and the later ‘external activities’.

Examples of ‘internal’ activities are:

• Removing work from machines, tools dies etc., cleaning down the work surfaces, fixing new tools in place,
conducting trial runs and adjusting the machines etc.

Examples of ‘external’ activities are:

• Getting instructions for the next job, procuring material and tools for the next job from the stores, returning tools
from the last job to tool stores etc.

There are three stages to the SMED technique application.

The first stage that Shingo developed in 1950 enabled him to reduce the average time for changing set-up on large steel
presses from four hours to less than ninety minutes.

The second and third stages, introduced in 1969, led to reducing the same to less than ten minutes.

Since Shingo developed his ideas mainly on steel presses and plastic moulding and extrusion machinery, he called the
technique ‘Single Minute Exchange of Dies’ (‘single minute’ meaning less than double figures, i.e. less than ten minutes).

The three stages of the SMED procedure are as follows:

Stage1: Identify internal and external activities; arrange for external activities to be carried out while the machine is
working on another batch, instead of during the set-up time.

Stage 2: Convert as many internal activities as possible into external activities, so that they too can be done while the
machine is working on another batch.

Stage 3: Continuously strive to improve or eliminate each element of the remaining internal and external activities.

It wasn’t until the 1980s that the Western world started applying SMED. Even today only a few manufacturers have
realized the tremendous benefits of the process.
Many companies assume that their processes are different and hence do not consider SMED principles. According to Dr.
Shingo, ‘knowing the process we are associated with implies understanding why we do it. If we know that, changing how
we do it is simple’.

Reducing set up time till it is economic to manufacture in small batches is a key aim of the SMED technique.

Quality Tools > Cause and Effect Diagram

Cause and effect diagram allows the team to identify, explore and graphically display, in increasing detail, all the possible
causes related to a problem so that the root cause(s) can be identified.

The cause and effect diagram allows the problem to be examined by all the team members.

Once the root cause(s) of the problem is discovered, rectification becomes easy. If rectification is not achieved, the cause
and effect diagram may indicate the best potential areas for further exploration and analysis.

The cause and effect diagram is popularly called as the fishbone diagram since it resembles the skeleton of a fish.

The principal branch (backbone) in the diagram signifies the problem or the “effect” and each major branch represents a
major cause of the effect.

Step 1
Write down the effect to be investigated and draw the 'backbone' arrow to it.

Step 2
Identify all the broad areas of investigation in which the causes of the effect may lie. Represent them as major branches
on either side of the backbone.

Step 3
Each cause should be fully investigated for hidden causes that would have given rise to these main causes.

Illustration:
Problem: For instance let us consider a problem of “High Employee Turnover”. Draw a diagram wherein this problem is
placed in the far right (As shown below)

Nevertheless this might not be the actual problem. According to Ishikawa this could be a symptom of the actual problem
that will be detected in due course.

Alongside the symptom or the problem, draw an arrow. This arrow serves as the main path that branches out to sub
causes/problems. Later new categories and problem will branch out from this arrow as represented in the figure.
The four causes for high employee turnover i.e. Management, Locations, Market place and benefits can be determined
through brainstorming exercises. Include as many people as possible in these brainstorming exercises. This improves the
reliability of the cause and effect diagram. More number of people involved means more causes can be identified.

Once the main causes (Management, Locations, Market place and benefits) are identified, conduct brainstorming exercises
for each of these causes. Through this the sub causes can be identified. The horizontal lines branching out from the main
causes (slanting lines) are the sub causes.

Quality Tools > Design of Experiments (DOE)/Experimental Design

Design of Experiments (DOE) is the application of geometric principles to statistical sampling. It helps minimise the
number of experiments necessary for problem solving or variance of estimated coefficients obtained through regression. In
short, DOE is an ideal set of experimental values relevant to a specific working environment.

The concept of DOE evolved in the field of agriculture, in 1919, when Sir Ronald A Fisher, a British statistician developed a
strategy for systematic experimentation. Genichi Taguchi, the Japanese guru on Experimental Design played a vital role in
the development of DOE.

DOE helps understand the entire working of a process. DOE is one of the many problem-solving tools used to find
significant factors in a process, their influence on each other, and on the outcome. DOE can be used for troubleshooting
machine problems, selection of processes or design parameters and modeling processes. When applied appropriately it can
enhance both process and product quality.

DOE is a powerful tool in designing for value. Through DOE, even a relatively inexperienced front-line engineer can easily
arrive at reliable conclusions despite innumerable changing variables.

Some vital tips for a successful DOE:

Understand the problem well: Industry experience has shown that many DOE projects fail due to lack of understanding
of the problem itself. Experiments are conducted based on the nature of the problem and the objective of the experiment.
Hence, it is crucial to have a clear definition of the problem before embarking on any kind of experimentation.

Detailed and exhaustive brainstorming: Often DOE teams spend 70-80% of their time analysing the experiment using
statistical skills/tools. However, for DOE to be successful, a blend of skills like planning, engineering, communication and
teamwork is required. It must be remembered that brainstorming is an integral part in the design of effective experiments.

Choosing the right characteristics: The selected quality characteristics for any experiment should be such that they are
stable, accurately measurable and signify the input-output relationship for the product/process

Choosing the right experimental design: Choosing the right experimental design is crucial for project success. The
right experiment considers various aspects like nature of the problem, number of factors to be studied, available resources
and time.

Perform a screening experiment: Screening experiments are essential to separate the ‘vital few’ from the ‘trivial many’.
They enable the team to reduce the number of factors or key variables to a limited manageable number to ensure optimal
use of resources.

Order experiment trials arbitrarily: Invariably certain factors affect the responses in any experiment or operation.
Some of them are ageing, vibrations, heating and power spikes. These factors can cause a bias when experiments are
being conducted leading to inaccurate results. Arbitrary conduct of the various trials can minimise such impacts.
Break the set of experiments into appropriate subsets: Experiments may have to be conducted across different days,
shifts, or machinery in order to be completed. Consequently, certain unnecessary variations might creep into the results.
Where it is undesirable to spread certain trials across different days or shifts, it may be helpful to club them into various
subsets of appropriate size and combinations. The trials in each subset can be conducted in the same day, shift or
machine, so that the experiments may yield the most accurate results.

Start small and grow by stages: Ideally, a set of experiments should be conducted in a serial manner such that the
information gathered from one experiment becomes an input to the next experiment. In this way the experiments can
start small and grow by stages.

Conduct validation experiments: Validation experiments are always advisable. They help determine if the results
corroborate with those of the mathematical model developed. If they match, the next logical step is to fine-tune the
process for improvements. If the results from the validation experiments do not match the mathematical model, there has
obviously been a failure at some point of the statistical analysis.

Additional Reading:

1. Statistical design of experiments

This article explains the Statistical Design of Experiments using slides.
http://www.6sigma.us/DOEUnit1ReadOnly/doeunit130.html

Quality Tools > Conflict Resolution

Conflicts at the workplace are a major issue of concern for the organisation. Workplace conflicts not only lead to strikes
and lawsuits, but also affect employee morale and productivity leading to absenteeism and employee turnover. Studies
reveal that senior executives spend almost 20% of their time resolving conflicts. Nevertheless, most managers and
supervisors do not recognise the cost of conflicts to the organisation.

Costs associated with unresolved conflicts are:

• Lost time.
• Quality of decisions made due to power struggles (compromising on purchase decisions of equipment and the
like).
• Replacement cost of skilled employees.
• Cost of lost efficiency due to restructuring workflow, undertaken to avoid interaction and conflict between the
involved parties.
• Sabotage, theft or damage of equipment.
• Cost due to low motivation and employee morale.

The nature of conflicts might differ but every industry has conflicts. Conflicts arise whenever two individuals with unique
perceptions and attitudes are involved. In today’s workplaces, conflicts could stem from

• Stress.
• Differences in background and perspective.
• Lack of harmony.
• Demand for teamwork over individual contribution.
• The root cause of a conflict must thus be identified and rectified.

Conflict resolution training is a practical approach to resolving conflicts. The training is categorised into two levels:

• Training individuals to effectively resolve their differences.

• Training individuals to act as neutral third parties in helping others achieve collaborative resolutions.

A key component of the programme should be communication skills. Participants should be taught to express their
opinions clearly and calmly and listen carefully.

Conflict resolution training empowers employees to deal with issues of concern early. This minimises conflicts and
enhances employee morale.
Tips > Obstacles To Achieving Quality Targets

Many factors prevent a company from achieving quality in its operations. According to Deming some of them are:

1. Seeking instant results:

There are no shortcuts to achieving quality. It is a slow and long process but definitely brings in worthwhile benefits.

2. Solving specific problems, and investing in technology ensures quality.

These can only contribute to improving quality partly, and are not an end in itself. A more holistic approach to incorporate
quality in a company is required.

3. Look for a source to copy practices:

Companies facing problems often tend to replicate other company’s procedures for improving quality. Deming emphasises
that only the theory behind the improvement of quality can be transferred. Procedures and practices however would vary
from company to company depending on their own unique situations and issues faced. What may be effective for one need
not necessarily be effective for another.

4. Wrong emphasis given in schools:

Most business schools emphasise on short-term profits. As a consequence most companies overlook the finer aspects of
quality. This in turn hinders the company’s transformation to improve quality for better long -term prospects.

5. Poor training in statistical methods:

Companies often fail to recognise the importance of providing their employees appropriate training in statistical methods.
Statistical approach helps an organisation in better analysis. It is advisable to use trainers who are practitioners of
statistics rather than mere theorists.

6. Blindly following specification standards (such as military tables) for acceptance:

Such emphasis on meeting some predefined ‘pass/fail’ standards will not minimise defects. It is only through a process of
continuous improvement that defects can be minimised in the long run.

7. Making the Quality Department solely responsible for Quality:

Quality is the responsibility of the entire organisation starting from the frontline operators to the management at the
director/CEO level.

8. Holding the work force responsible for failure:

According to Deming 94% of quality problems are due to the problems in the ‘system’ rather than the fault of the workers.
A good ‘system’ is the responsibility of the management. Hence the management should evaluate the ‘system’ and try to
transform it instead of blaming the workers.

9. Claiming the installation of quality control in their company:

Good! But Quality control should evolve based on continuous learning and improvement process.

10. Notion that meeting specifications is sufficient:

Customer satisfaction must be the prime focus in any quality system. Hence, quality is not just about meeting
specifications, but an endeavour towards customer satisfaction.

11. The philosophy behind zero defects:

‘Zero defects’ in terms of eliminating variation can never be achieved. Variations will always exist. Companies can only
strive to bring them within acceptable limits, and continue to minimise defects.

12. Belief that only a person who knows the ‘Business In and Out’ can improve it:
True, but so can anyone who knows the principles for improving systems. Personnel can learn from such a person and
apply the principles in their own organisation

Continue the tour:

Deming's Speech To The Japanese

Tips > Obstacles To Achieving Quality Targets

Many factors prevent a company from achieving quality in its operations. According to Deming some of them are:
1. Seeking instant results:
There are no shortcuts to achieving quality. It is a slow and long process but definitely brings in worthwhile benefits.

2. Solving specific problems, and investing in technology ensures quality.

These can only contribute to improving quality partly, and are not an end in itself. A more holistic approach to incorporate
quality in a company is required.

3. Look for a source to copy practices:

Companies facing problems often tend to replicate other company’s procedures for improving quality. Deming emphasises
that only the theory behind the improvement of quality can be transferred. Procedures and practices however would vary
from company to company depending on their own unique situations and issues faced. What may be effective for one need
not necessarily be effective for another.

4. Wrong emphasis given in schools:

Most business schools emphasise on short-term profits. As a consequence most companies overlook the finer aspects of
quality. This in turn hinders the company’s transformation to improve quality for better long -term prospects.

5. Poor training in statistical methods:

Companies often fail to recognise the importance of providing their employees appropriate training in statistical methods.
Statistical approach helps an organisation in better analysis. It is advisable to use trainers who are practitioners of
statistics rather than mere theorists.

6. Blindly following specification standards (such as military tables) for acceptance:

Such emphasis on meeting some predefined ‘pass/fail’ standards will not minimise defects. It is only through a process of
continuous improvement that defects can be minimised in the long run.

7. Making the Quality Department solely responsible for Quality:

Quality is the responsibility of the entire organisation starting from the frontline operators to the management at the
director/CEO level.

8. Holding the work force responsible for failure:

According to Deming 94% of quality problems are due to the problems in the ‘system’ rather than the fault of the workers.
A good ‘system’ is the responsibility of the management. Hence the management should evaluate the ‘system’ and try to
transform it instead of blaming the workers.

9. Claiming the installation of quality control in their company:

Good! But Quality control should evolve based on continuous learning and improvement process.

10. Notion that meeting specifications is sufficient:

Customer satisfaction must be the prime focus in any quality system. Hence, quality is not just about meeting
specifications, but an endeavour towards customer satisfaction.

11. The philosophy behind zero defects:

‘Zero defects’ in terms of eliminating variation can never be achieved. Variations will always exist. Companies can only
strive to bring them within acceptable limits, and continue to minimise defects.

12. Belief that only a person who knows the ‘Business In and Out’ can improve it:
True, but so can anyone who knows the principles for improving systems. Personnel can learn from such a person and
apply the principles in their own organisation

Continue the tour:

Deming's Speech To The Japanese

Tips > Deming’s Speech to the Japanese

What we need to do is learn to work in the system , by which I mean that everybody, every team, every platform, every
division, every component is there not for individual competitive profit or recognition, but for contribution to the system as
a whole on a win-win basis.
Dr.W.Edwards Deming.
In 1950 the Japanese Union Of Scientists and Engineers (JUSE) invited Deming to help Japan in its quest for improving
quality and productivity. Deming delivered a series of lectures to the then leading industrialists in Japan. The Japanese not
just listened to Deming, but also applied his principles in their work. The resulting transformation in Japan was nothing
short of an industrial miracle.

In appreciation of Deming’s contribution, the Japanese honoured him with the Emperor’s second order medal of the sacred
treasure. They also instituted the ‘Deming’s Prize’–the highest ranking quality award in Japan-after him.

What is it Deming taught the Japanese that completely transformed them to become the world’s Industrial leaders?

The following is a brief of Deming’s teachings to the Japanese:

1. View the company as a system:

Deming in his famous flow diagram showed a simple and in-depth picture of a company viewed as a system. A system is
defined as a collection of components. Similarly, a company is to be viewed as a system consisting of suppliers, customers,
production facilities and distribution networks.

Customer is the most important component in the whole system. The company actually exists by meeting the needs and
wants of the customer. Hence, he should be at the centre of all of its decisions and actions. The company should
continuously take feedback from its customers and accordingly make improvements.

Suppliers too play an important role in the system. Companies must partner with their suppliers to ensure better quality in
their goods. Deming suggested that a long-term mutually beneficial relationship with suppliers is to be developed and
maintained by companies.

It was for the first time that the Japanese got a systemic view of their operations. Till then the Japanese had been trying to
make improvements but their efforts were disconnected and inconsistent. The systemic view changed that.

The flow diagram given below directed the Japanese efforts towards being more market focussed. The result was a
complete turn around of the Japanese industry. The diagram is so important that Deming put it up for every conference
involving the top management.

2. Quality begins at the top:

According to Deming only 6% of quality problems can be attributed to workers .The rest of the 94% is due to the system.
It is the management who design the system where the workers work. Therefore, blaming the workers for something
going wrong is like searching for a scapegoat. The fault generally lies with the system and the power to effect
improvement in it lies with the management.

The management should demonstrate their commitment to quality not just through words and exhortations but also
through actions. They should display facts and figures in the form of charts and other visible representations to convey
their commitment to monitor quality. The frontline workers and quality personnel will only take quality as seriously as they
perceive their management doing so.

3. The Deming chain reaction

Deming gave a new perspective to the benefits of improving quality. This he gave in the form of a chain reaction.
 1. Improved quality.
2. Decreased costs because of less rework, fewer mistakes, fewer delays, snags and better use of machine-time and
materials.
3. Improved productivity.
4. Capture the market with better quality and lower price.
5. Stay in business.
6. Provide jobs and more jobs.

4. Market surveys and statistics:

Deming emphasised the need for a customer focus to the Japanese. Previously, the Japanese had a three-element view of
their business i.e. design a new product, manufacture it and then sell it. Deming introduced to them the new element of
market survey (which was new to the Japanese then) as a means of getting feedback from the customer. He said that it
was only through market survey that the Japanese could understand the customer better. They could thus make the right
product with the right quality attributes for the right price.

Deming drew these four elements of a business in the form of a circle. This was to convey that product development and
continuous improvement through customer feedback should be a never-ending process.

Deming also emphasised that statistics and statistical tools can be used effectively in each of the four stages to optimise
efforts.
5. Need for trust and cooperation among companies:
Deming communicated to the Japanese industry devastated by the Second World War the need for sharing good practices.
If a company learns something new it should share it with other companies so that all can benefit. Thereby, they would
help each other grow instead of pulling each other down through competition.

These tips given by Deming saw a revolution in the Japanese industrial sector. The Japanese implemented Deming’s tips to
achieve success within a very short time. Deming’s speech to the Japanese indeed gave a new meaning to quality.

Best Practices > Empowerment…Understanding The Paradox!

Here is the story of a small company, which began its journey of excellence with a small team and stumbled as it grew. It
details how the company began its transformation after its CEO attended one of Deming’s seminars….

“We can do anything!”…This ‘can-do attitude’ is what Dura-Tech Inc., (DTI) was born with in the late 1970s. What once
began as a small team of six employees operating from a garage grew exponentially into a company with over 200
employees.

Dura-Tech manufactures high quality labels, dials, nameplates, panels, overlays and appliqués for components of
automobile dashboards, medical and recreational equipment, appliances, business machines, consumer electronics and
industrial markets. The mission of the company is to “Delight customers with world class products, services and value”.

A visit to the company reveals a busy atmosphere, with a high degree of synergy, satisfaction and joy among the
employees. What motivates them? Has it always been like this?

The right start!

In the year 1979, a group of entrepreneurs with Peter Bentz as president formed DTI, a small company that was
structured traditionally. The company culture was typically entrepreneurial, where every employee knew each other and
performed all tasks. It was more like a family where even the President joined in various tasks to ensure prompt delivery
of orders. The spirit of the team was such that they made optimal use of available resources and strove to make
incomplete processes and systems work efficiently. Due to the strong work ethics, quality products, efficiency and
customer satisfaction, DTI recorded an annual growth rate of 20%.

Losing ground!
The rapid growth rate of DTI implied transitioning a small family of employees, who worked together to produce the best
quality products into a new organisation. This was a challenging task and a difficult phase for the employees. As the
company rapidly grew in size, employees no longer had the same alliance with peers. The business methods that once
worked for the small group were just not working in the new, expanding work group. The company found it very difficult to
implement new working systems and introduce new products. They soon began losing ground.

A step backwards!
In order to regain their control over the turbulent circumstances, DTI decided to establish the traditional management
system in its expanding empire. Employees were assigned specific tasks every day. Although this was a step backwards
from the early days, it was necessary to provide a foundation to accommodate new employees, systems, challenges and
products. Giving specific directions to employees and making decisions for them would help reduce confusion and stabilise
the change process. New structures and policies were implemented and documented to gain control of growth.

Growing rifts!
In the eighties, DTI found that there existed a clear difference between existing management philosophy and the
company’s vision. The company was unable to cope with increased customer orders and there were pressing demands
from existing customers for improving quality of products. As per the cultural beliefs of the early DTI days, the company
could handle and resolve any problem. Previous performances reinforced these beliefs. However, with the addition of more
employees, the introduction of new strategies like applying greater thinking and analysis and being more careful did not
work. The results were inconsistent.

At the crossroads!
DTI found that its once close-knit family of employees had split into factions over time and were at cross-purposes with
one another. The growth process at DTI was thus full of tribulations. Many new ideas were embraced, tried and discarded.

Quality was then thought of as the ‘magic potion’ that would rid the company of all its ailments. Various schools of thought
were read, understood and tried. Quality managers and process engineers were added to the company to improve quality.
Quality circles were introduced in an endeavour for excellent returns and breakthroughs. A quality action plan was also
introduced. But sadly, the entire operation lacked employee and management commitment. Teams were purported to
work well and prove beneficial but the output was often chaotic and non-productive. What had gone wrong? Where? Why?
These were some of the questions that had to be answered by DTI for remedial action.
The answers were not difficult to get once the company sat back and thought.

Retaining control!
DTI introduced the concept of quality circles and encouraged formation of teams. Employees were instructed to solve
problems and improve processes together. Nevertheless, the management was still controlling and directing team
activities, operations, and thus maintaining decision-making authority. This was a grave error. Teams were unable to take
decisions for their processes. Customer problems were brought to the direct attention of the management, who
immediately directed the blame at a team or an individual. This augmented the fear of committing mistakes and a
reluctance to admit mistakes. Open and honest communication, a crucial aspect that promotes growth and efficiency in
any company diminished.

Wasted efforts!
Fear in the culture at DTI increased workplace conflicts and employees undermined one another. Employees increasingly
believed that if they proved to be more skilful or knowledgeable than their peers, they would be rewarded. This
contradicted the attitude that existed in the early days resulting in resentment and confusion. The atmosphere of co-
operation and teamwork vanished, and the results were diametrically opposite to what was expected from empowering
employees. More time was spent in team meetings to resolve and settle problems.

True empowerment
Change at DTI was attributed to various reasons: increasing volumes of sales, size of the company, employee turnover and
the need to improve and meet increasing customer demands. It was evident that true change could take place in an
atmosphere that supported true empowerment. Merely deciding to be empowered and telling team members that they are
empowered while retaining decision-making authority at the top would not bring about improvements. The challenge was
to develop and nurture a work atmosphere where honest and open communication existed.

The guiding light!

At this juncture, DTI’s President, Peter Bentz, attended a Deming seminar. Here he envisioned true quality and
improvement, which triggered a transformation in his thinking on how to shape improvements at DTI. The entire company
was made to undergo a Deming Seminar to envision a new future for DTI. Peter Bentz began motivating employees and
the true empowering process evolved.

A new direction!
It was obvious that increasing customer demands and the need to keep pace with technological advancements required
education and new skills. Employees obviously had varying levels of training needs and very few of them were comfortable
with the idea of being empowered. What the employees required was a model of what empowerment means and a mentor
to guide their actions. Taking the right decisions and making wise use of empowerment implied having adequate
knowledge and decision-making skills.

Changing for the better!

DTI gradually restructured by designing and implementing teams. DTI then imparted leadership training for management
and team leaders. Earlier, leaders controlled others, but now, the new leader was expected to motivate and act as a
mentor to his team. Top managers and team members began changing and eventually the team members changed. DTI
appointed a Process Improvement Coordinator to implement process improvement using teams. The steering committee
developed a series of resource guides, for training team members regularly.

Detailed work instructions for training team members and process improvements were compiled in the manual ‘Continuous
Improvement-A Resource Guide’. Guidelines for making decisions were documented in ‘Team Empowerment-Decision
Making Guidelines’. These guidelines gave a clear picture of what decisions teams could make and who should be involved
in the decisions. An inventory of good team-decisions was also documented. All these improved and accelerated the
change process. The company also motivated natural leaders amongst its employees to accept responsibilities outside their
areas of work.

The Dura-Tech University was established to impart a series of training courses for team members to acquire technical and
team-building skills. Cross training was encouraged. This made team members more flexible and appreciative of their
peers. The committee also realised that in order to make informed decisions about their work, key business information
had to be shared with the team members. Enabling team members to take decisions at process levels reinforces process
ownership and increases employee commitment.

Information about the business and its customers was disseminated at company meetings. Simultaneously, Peter Bentz
took to chatting with employees to develop trust. This provided employees an opportunity to directly meet the President
and ask questions or provide feedback.

Soon, DTI had an open door policy came. Information sharing evolved into monthly company-wide meetings that were
open and encouraged honest discussions on financial and production aspects.
As the process of empowerment evolved, profit sharing initiatives were implemented to reward team members for their
efforts.

The entire process of change and improvement, which made DTI a leader and model for quality and empowerment, was
described as ‘The World Class Quality Leadership Program’. Over the years, DTI increasingly became a flatter organisation.
DTI realised that more levels in the hierarchical structure only created conflicts and interfered with the company’s goals.
By maintaining a flat organisational structure and building on the strengths of its people, values like trust, respect,
willingness to learn, adaptability and flexibility developed and gained importance. The company also attributes its
prosperity to the unreserved encouragement for all team members for fostering creativity in attaining its vision.

Today, DTI describes itself as a maturing company. Employees are now aware of what is expected of them and a marked
respect and trust is visible. The attitude now is a win-win one.

Yet, there are some paradoxes. Learning and growth were not attained as quickly as envisioned. The entire culture and
process changes required changes in the beliefs of individuals, groups and the company as a whole. The level of discomfort
experienced during the transformation process was higher than expected. Wanting to be empowered and being truly
empowered are miles apart.

True empowerment not only embodies commitment and ownership arising from being deeply involved with the workplace
and its processes, but also calls for allowing mistakes to happen, rewarding risk-takers, avoiding blame and delegating
authority. Moreover, empowerment does not exist equally for every employee in a company. In any company some
employees are empowered, some are partially empowered while others are to yet be empowered. The challenge is to
continually reinforce teamwork and decision-making at the process level.

According to Dura-Tech Inc., when employees are given opportunities to be creative and express what was previously
hidden from them and the company, there evolves a system of greater trust, respect and belief in themselves and the
company. This helps create a new culture where the benefits include customer and employee satisfaction, innovative
systems and bottom-line improvements.

To be successful in today’s competitive markets, companies must first extend their focus. This focus is generally restricted
to efficiency and quality and creates a culture for innovation and continuous improvement. Empowerment is the first step
in this direction. Dura-Tech's is a true success story, worthy of acknowledgement and emulation, especially in today’s
competitive and advanced markets.

Continue:
Perform A Miracle

Best Practices > Perform A Miracle

Deming held a very controversial viewpoint regarding employee performance reviews and ratings. He suggested the
abolishment of the annual review or merit rating and management by objectives. Deming believed that it was the system
that needed to be continuously reviewed and improved...

Performance appraisal is on the rise. It used to be that time of the year when work was put on hold while enormous
quantity of management hours were spent in the earnest ritual of rating and ranking individual performance.

Now the practice has become more frequent and employees are being appraised twice a year, monthly or in some cases
even weekly. In the incessant drive to re-invent appraisal, it is now known in many organisations as the 'one-to-one'.

Perhaps persistent re-invention is nature's way of indicating that we ought to question whether appraisals really work. Is
the time and effort well spent, or is it undermining performance in the name of good human relations?

The notion behind performance appraisal - that employees should be held accountable for their performance - is plausible.
However, evidence suggests that the premise is wrong. Employee behaviour in organisations and thus their achievements
are governed more by the system they work in than by what they are able to do.

To take a simple modern example: in a call centre, employees are appraised on how many calls they take, how long they
spend on each call and the quality of their call response. In fact, their performance is governed by many factors beyond
their control - the nature of the calls, the availability of information, the behaviour of other employees in other
departments of the organisation and so on. Holding the employee accountable in such circumstances merely causes stress.

It is not just employees who suffer in this way. Norma was a customer services manager for a high-street bank who had to
leave the organisation because of stress. She had been given five targets, of which she succeeded in three and failed in
two. Her appraisal meeting focused on the two she had failed. Norma was perplexed for, besides being unable to explain
why she had failed on the two targets; she was also unable to account for the three 'successes'.

All performance is subject to variation. A study of measures used to judge Norma's performance revealed that all had been
subject to normal variation. A 'pass' or 'fail' had been just as probable on all five measures. She had, effectively, 'lost the
lottery' on two measures. Yet Norma believed, as her manager did, that she was responsible.

Like Norma and her manager, most employees accept accountability for their performance. When, as is inevitable, they
risk losing the lottery, people 'cheat because they will do anything to keep the boss happy'. Their ingenuity is engaged in
surviving rather than improving performance - an unnecessary waste of human talent.

Contrary to assumptions, appraisal is not an effective means of performance improvement - it is judgment rather than
feedback; judgment imposed by the hierarchy. Useful feedback, on the other hand, would be information that shows both
the manager and employee how well the work system functioned, and suggests ways to improve it.

World-class organisations exemplify this. In the Toyota production system there is no recognisable performance appraisal
system. Every operation in the system has an associated measure. The measure has been worked out between the
operators and their managers. In every case the measure is related to the purpose of the work. That measure is the basis
of feedback to the manager and employee alike.

Decision-making is integrated with work. If there is a problem with performance, it is immediately reflected in the
measure. The manager and operator seek the causes and turn them into seeds for improvement of the method.

Toyota's basic idea is expressed by the axiom 'bad news first'. Both managers and employees are psychologically safe in
the knowledge that it is the system - not the employee - that is the primary influence on performance. It is the
management's responsibility to ensure that employees operate in a system that enables them to perform.

Performance appraisals, on the other hand, sprang from a different managerial assumption. To judge achievement,
managers use data about an employee's activity, not the process or system's achievement of purpose. The result is that
performance appraisal is judgment of one over another, ignoring the true influences on performance. Thus, the appraisal
experience focuses on pleasing the boss, besides being psychologically unsafe and socially driven, determining who is 'in'
and 'out'.

HR professionals claim that managers should strive for objectivity and thus feedback rather than judgment. In short the
nature of hierarchy distorts the concept of feedback into judgment because performance measures are conceived
hierarchically.

When judgment is replaced by feedback in the true sense, organisations will have a lot more time to devote to their
customers and their business. No time will be wasted in appraisal. This however, requires a fundamental shift in the way
performance appraisals are viewed.

Continue:
Managing Customer Satisfaction

Best Practices > Managing Customer Satisfaction

In his speech to the Japanese, Deming emphasised on the importance of listening to the customer. He highlighted the
need for regular customer feedback through market surveys to continuously improve on products.

This case highlights how Rank Xerox when threatened by a competitor went back to its customers to understand their
needs and made improvements …

It is a well-known fact that customer satisfaction significantly affects customer retention and loyalty, since customers are
the best advocates for a company. Their word can be very persuasive in influencing potential customers to choose a
company and its services. An unsatisfactory experience for a customer will result in negative publicity for a company.
Customer complaints offer a company the opportunity to pinpoint deficiencies, highlight strengths, and even alert them to
potential product or service problems before a major crisis arises.

Rank Xerox was a pioneer in manufacturing and marketing a wide range of office information equipment and reprographics
throughout the world. Within a short span of ten years, it was recognised as a leading high technology company with
innovative products in reprographics, laser printers, electronic printing systems and colour copiers. The company’s
revenues jumped from $53 million to $4 billion two decades after start-up. However, a few small-sized Japanese
companies that offered high quality and low priced copiers soon vanquished Rank Xerox’s rapid growth and market
position. By the late 1970’s, Rank Xerox lost its market leadership and 80% of its market share in Europe.
This was a real blow to the company, which soon began to look for survival strategies. It took up a drive for quality as a
means to survive.

As a first step towards improvement, it took up a series of benchmarking studies to determine the underlying causes for
competitor success. Studies revealed that the disadvantage with Rank Xerox was in terms of product pricing, quality and
longer time taken for new product introduction in the markets. It was then that Rank Xerox introduced the ‘Leadership
through Quality’ initiatives, which focused initially on improving product quality and offering products at competitive prices.
Gradually, the focus shifted to establishing customer-supplier relationships (both internal and external) and evolving
methods to meet these requirements.

Rank Xerox used customer satisfaction data to improve existing processes and new product development. This was done
by:

• Listing the various causes that give rise to problems.

• Identifying the root causes using Pareto analysis, check sheets and solution effects.
• Arriving at best possible solutions.
• Prioritising and testing selected solutions.

A vital aspect of Rank Xerox’s efforts was to listen to customers to gain an in-depth understanding of their requirements.
Customers were asked to evaluate product attributes both in terms of how the company measured up and how important
each attribute was to them. Keeping the changing customer needs in mind, Rank Xerox continually updated the attributes
to reflect changes. This method of evaluation helped the company to keep track of changing customer needs and take
proactive steps to fulfil them.

The company adopted an escalation process to enable customer problems to be resolved to the complete satisfaction of
the customer. Thus, when problems were not resolved at the operating unit level, they were escalated to higher levels to
ensure complete and adequate resolution. Empowerment of employees enabled them to provide customers on the spot,
timely resolution to their problems.

This ensured that problems were resolved at the level nearest to the customer and referred upwards only when decisions
were outside their jurisdiction.

Rank Xerox took initiatives to measure customer satisfaction during different stages of the product lifecycle like:

• The point of purchase.

• Customer experience at the time of purchase.
• Service at the time of purchase and during subsequent interactions.
• Service offered to the customer during the life of the product.

An important aspect of Rank Xerox’s strategy is the collection of data and information. This enables the company to:

• Track progress towards company goals.

• Refocus activities in areas where milestones were not adhered.

Rank Xerox now employs about 26,000 people in Europe and works with 400 component suppliers The company has a
product range of over 300 systems, which include advanced information storage and retrieval technology. Their extensive
customer base consisting of commercial, industrial and government organisations indicates how the company meets and
satisfies varied requirements within its diverse customer base.

Case Studies > Deming’s Cycle In a Plastics Container Plant

A plastics blow-moulded container plant solves problems and improves processes thanks to the Deming’s cycle.

Introduction:
Deming laid emphasis on innovation even in the minor functions of a process. He advocated that innovation is only
possible through a creative approach to ‘problem solving’ in the system. Deming’s cycle is one such approach to problem
solving, which contains four stages: Plan, Do, Check, and Act.

Identifying the problem, gathering the data and developing innovative solution ideas constitute the plan phase in Deming’s
cycle. In the Do phase experiment is conducted on the innovative idea thought of in the plan phase and is evaluated in the
Check phase. Then finally in the Act phase this idea is implemented.
This case study gives insights into how process innovation is achieved using Deming’s cycle.

Organisation:
A study was done for a period of two years on a plastic facility in United States. The company was into production of blow-
moulded containers. The company followed a batch system of production and had a 5% market share at the time of the
study.

Implementation of Deming’s cycle:

To ensure successful implementation of Deming’s cycle, the company formed a Supervisory Group and a number of smaller
Teams from among its employees. The duties of the Teams and the Group could be summarised thus:

Supervisory Group: Members who have an adequate knowledge of various functions in the facility constitute this Group.
They were responsible for the Plan phase. Hence identifying problems, collecting relevant data and working out appropriate
solutions, form the duties of Group. They also reviewed the results from the Do, Check and Act phases.

Teams: Their duties include assessing the ideas generated by Group and executing them through the Do, Check and Act
phases of the PDCA cycle.

Successful implementation requires application of PDCA cycle even in micro-level functions. This requires active
participation of workers. Hence, workers involvement was encouraged at every phase of the PDCA cycle.

Workers under the guidance of the Teams operated the prototype line developed to test the new solutions suggested in
plan phase. They were encouraged to communicate and suggest new ideas to the Teams or Group. They were also allowed
to test, review and rework ideas through their own PDCA cycle before suggesting it to the supervisory group. By involving
them in problem solving the workers became active participants in the company’s drive for continuous improvement.

The supervisory group sought the problem areas within the plant that needed improvement. After careful consideration the
group decided to address the following three areas because of their greater influence on the plant production.

a) Material handling.
b) Compensation systems.
c) Plant cleanliness.

The application of PDCA cycle by the company in each of the above-mentioned areas is explained below.

a) Material handling system:

Plan:
The supervisory group inspected the reports of a particular production line over the previous one month. They observed
that the production line had been down more than 20 times in the previous month due to raw material shortage. On an
average the line would be down for almost half an hour every time it stopped. The down time for the entire month was
therefore really significant.

Closer analysis revealed that the down time occurred whenever the production line exhausted its raw material supply.
Every line was short of raw material at least 20-30 times in that month. They observed that the operator was manually
feeding the raw material. Thus the line would go down each time the operator was unavailable or attending to some other
task during the replenishment. The Group also realised that the same problem was being faced by all the other production
lines in the plant.

There were two apparent solutions to this problem:

• Increase the number of operators.

• Automate the entire production line.

As the management was reluctant to increase the number of operators, the Group was left with the second option.

To check the effectiveness of automation the PDCA Group visited other companies with a similar production system. The
Group observed one particular company did not face any delayed replenishment problems as the production line was
completely automated. Though the automation would cost $100,000, the Group decided in favour of trying out this option.
This was because if effective the solution would have a ROI in less than 2 years.
Do:
However, before making the investment, the plant wanted to test the solution in its own plant environment. Hence, a
cheaper prototype system capable of managing raw material supply was developed. The prototype consisted of two small
production lines at 10lbs-compressed pressure each The lines were expected to replenish raw material without the
assistance of the operators.

Check:
The two lines were observed for one month. Since the lines functioned smoothly without any hindrance, they decided to
install the system on the actual production line.

Act:
Installation of the new system took over two months. As the 10lbs air pumping mechanism seemed to be sufficient to
operate the production line, the Group maintained the same air pressure in the new system.

Check:
To certify the new system the Group monitored its performance. They however observed that the line was not functioning
as efficiently as expected. Further study revealed that the 10lbs air pressure pumping mechanism was not sufficient for
the new line and hence was causing the stoppage.

Act:
The 10lbs-air pumping unit was replaced with a higher 18 lbs air unit.

Check:
After replacing the air-pumping unit, the Group did not observe any reports of machinery falling short of raw material.

In fact, the lines were functioning so smoothly that they had to be shut down so that the maintenance personnel could
conduct the normal maintenance work. Previously, the maintenance personnel utilised the machinery down time due to
raw material shortage for regular maintenance work. However, the number of times the line had to be stopped to perform
maintenance work on it was much less than the down time it experienced due to material shortage.

Result: The material handling solution was successful.

b) Compensation system:

Plan:
The facility had a system of three manufacturing shifts. The Group observed a lack of cooperation amongst the employees
of the three shifts. Crucial information and solutions to problems were not being shared between members of different
shifts. Certain employees even resorted to sabotage to undermine the work of other shifts.

To uncover the problem and resolve it the Group conducted a series of interviews with the employees. They discovered
that the company’s system of weekly bonuses to the highest producing shift was the cause for the non co-operation. The
system had created a tremendous sense of competition between shifts resulting in negative practices.

The Group reviewed the entire compensation and bonus structure. Every new structure suggested to reward highest
producing shift led to dissatisfaction of one section of workers or the other. Hence, they decided to eliminate the system of
weekly bonuses. However, to compensate the reduced income, the Group developed a bonus structure based on the
production of the facility as a whole.

Act:
A bonus system tested for few employees would result in undesired behaviour of employees. So the Group did not conduct
the Do phase of the cycle. Instead they directly implemented the new bonus structure.

The Group observed that a certain section of employees were worried about the fact that their overall bonuses would be
reduced drastically since it was to be divided among all three shifts. The Group therefore had to demonstrate how the lack
of communication affected production in the plant everyday. They helped employees recognise the importance of increased
production and how it would make up for their reduced income. They impressed upon employees that by preventing errors
production could be increased enormously and the resulting benefits shared in the form of bonus.

Check:
No data was collected for review but formal discussions with supervisors and workers showed that communication among
shifts increased by as much as three times. The new system of bonus was more consistent. Thus, though workers’ income
diminished by 3%, the overall satisfaction levels of the employees was high and they were striving hard to increase the
production.
Result: The new compensation system proved successful.

c) Plant cleanliness:

Plan:
The plastics container manufacturing facility had a transfer belts system to carry products from one part of the plant to the
other. The Group observed that the transfer belts and the products coming out of the transfer belts were often
contaminated with grease. The source of the contamination was the uncovered cylinders in the plant, which kept dropping
grease on the transfer belt.

The personnel in charge for packaging spent a substantial number of man-hours cleaning the grease on the products
before packing it. Hence, the Group decided to find a solution for this problem.

As the cylinders could not be covered due to certain inherent complications, the Group had to think of alternatives. The
Group initially thought of totally eliminating the transfer belts system from the plant. However, as the cost for transporting
the products physically was very large, the Group decided against it. The only feasible solution seemed to be to find an
efficient way to clean the system.

Observation revealed that cylinders drop grease at regular half hour intervals. If the grease could be cleaned immediately
after it fell, the product contamination could be drastically reduced. Hence, the Group decided to develop a cleaning cycle
corresponding with the time of the dropping of grease. Thus the time spent on cleaning grease from the products would be
significantly reduced. The operators would be the right people to clean the transfer belts, as they were the first to observe
the grease dropping.

Act:
As the Group was confident of its solution they decided to skip the Do phase and directly got into implementation. The
implementation however met with some resistance from the operators who saw the cleaning up activity as additional
burden for them. They however complied with the new requirement reluctantly.

Check:
After the operators started the regular cleaning cycles, the Group observed that contamination of products dropped by
90% in a month. However, the operators were still reluctant to do the cleaning. The Group also observed that some
amount of cleaning was still required by the packagers.

Result: Though there seemed to be some amount of resistance, the solution seemed worthwhile.

Results of the PDCA implementation:

Initially, the plant personnel did find it difficult to apply the PDCA cycle of improvement, as it was new to them. The other
issue they faced during the initial stage was deciding on which projects to implement the PDCA cycle. However later, the
PDCA Group managed to come to a consensus on three projects i.e. material handling system, the compensation system
and plant cleanliness. They arrived at this consensus based on what the majority felt would benefit the company the most.

In a span of six months after initiating the PDCA cycle of improvement, product returns from customers dropped to 0.01%
and line scrap reduced by 2%. The PDCA cycle has since then gained greater adoption in the plant.

Continue:
Train To Loyalty

Case Studies > Train To Loyalty

One of Deming’s 14 points to the management states, “Institute a vigorous programme of education and self-
improvement”. The following article explains how present day companies are finding employee loyalty a hidden training
benefit.

Constant reorganisation, mergers and downsizing have created a climate that endangers employee loyalty. A
BusinessTrack survey conducted in February 2002 revealed that 65 percent of managers believe employees are now less
loyal to their employers than in the past.

Garnering employee loyalty is important for two key reasons. First, loyal employees are less expensive and second,
customer satisfaction and employee loyalties are correlated. Perhaps, now more than ever HR managers need to find
innovative and affordable ways to instil employee loyalty.

What employees want?

Employees often critically evaluate the ‘perks’ an organisation offers them in their jobs. Most organisations enhance health
care benefits, provide retirement security, flexible work arrangements, opportunities for professional growth and reward
good performance. Some others are found offering continuous training, which is gaining increasing importance.

Continuous training- put to use:

Reynolds and Reynolds Company, a leading information management company, serves the general business, automotive
and healthcare markets. The company recognised that its expansion created a concurrent need to develop employees’
ability to work together to evolve a Team culture. It also recognised that to achieve its corporate vision and growth related
goals, it would have to provide training that develops problem-solving approaches while building core competencies.

Reynolds and Reynolds also established a need to provide continuous training opportunities so that employees could
achieve high performance levels. It outsourced its ‘training’ to develop and infuse a new company culture with the latest
management and leadership concepts and practices. Employees of Reynolds and Reynolds report saving a significant time
consequent to improved employee knowledge and skills developed through continuous training. The new corporate
culture not only encourages productivity, but also attracts employee loyalty.

Value of continuous learning:

The economy is making a transition into a high-skilled, information-based one, which results in a skills gap. Also
demographics indicate a rise in the number of retirees, shrinking the workforce further. Continuous training ensures that
the employer continues to provide quality service despite the changing environment.

An employer, who recognises that the organisation’s uninterrupted aptitude to respond quickly to new priorities and
challenges depends primarily on a knowledgeable workforce with transferable skills, will appreciate the benefits of
continuous training.

Continuous training addresses the need to:

• Develop a flexible labour market to meet the needs of technological changes and labour market demands.
• Develop a competitive market economy.
• Diversify into new areas of economic activity.

The concept:
‘Continuous education and training programmes are designed to train and retrain learners through both classroom
programmes and on-site training programmes in the workplace.’ While some employees hold degrees and others
workplace qualifications, they nevertheless look forward to continuing education to help them advance their careers or
improve their “market value’.

For instance, certificate programmes, are sequential programmes of study focusing on specific fields. These programmes
are a favoured and popular way of continuous education. Covering a multitude of subjects, they allow employees to
develop and learn the latest skills and update them with current related information.

The balance:
With the work/life balance being redefined as work/life integration, organisations are offering training to help employees
manage their personal lives, increase performance and encourage development.

While struggling to keep pace with the fast changing economy employees desire to work with organisations that look out
for their best interests. “Investing in employee training is one way of showing how much the company values those
employees.” says Dennis Sterling, director of organisational effectiveness for a manufacturing company.

Continuous training helps employees:

• Increase their adaptability to changing circumstances and into new professions.

• Better their qualifications and ability to compete in the labour market.
• Develop professional abilities.

Most agree, yet….

Business analysts agree that continuous training and education are essential to remain competitive. In fact, most
organisations provide and support continuing education for employees. They consider it an investment for a more
competent workforce. Yet, many organisations choose not to back continuous learning. Why is that?

Organisations fear that their trained and skilled employees will leave them for better jobs. However, Sterling believes the
fear is unfounded. He says, “ Employers are short-sighted if they think training employees will simply make them
marketable as employees to be hired away by competitors. The greater risk is that the company will lose employees if they
don’t train them.”

In the US, in one year alone businesses invested 55 billion dollars on employee education. However, many employers
world over, propose implementing continuous training and education to increase employee knowledge and employee
loyalty.

In a rapidly changing workplace competing for skilled and loyal employees is of prime importance. Also a supportive and
stimulating work environment is a necessity.

It’s time HR managers realise that supporting continuous training encourages employee loyalty. As a management
consultant puts it, “Managements will recognise the need for education and retraining when they realise that people are
an asset and not an expense.”

Continue:
Contracting Success

Case Studies > Contracting Success

The following case study shows how Isaac a HVAC contracting company leveraged “Constancy of purpose” and “Employee
education and training” to win the 2002 Residential Contractor Of The Year award.

Isaac Heating & Air Conditioning is a Heating, Ventilation and Air conditioning (HVAC) contracting company located in
Rochester, New York in the US. The company won the 2002 Residential Contractor Of The Year award given by Contracting
Business Magazine. Isaac won this award from over 34,000 contracting firms in the US. Some of the criteria considered
while evaluating a contracting company for this award include:

• Providing active training for employees -- technical, management, and customer service.
• Being open to new ideas, technologies, and business practices.
• Having a philosophy on which the company is built.
• Establishing a marketing strategy and a marketing budget.
• Having credible credit references.

Started in 1945 in a garage of a small town in New York, Isaac began by providing heating systems to the houses in the
area. Gradually, it moved into the Air conditioning business. Today, it has grown into a $12 million, 130 employee
company that serves over 77,000 customers.

Though the revenues that come from installing HVAC systems in new residences has gone down, Isaac continues to grow.
One of the contributors to this is the repair and maintenance service it provides its customers. About 15,000 of Isaac’s
customers have currently signed service contracts with Isaac.

Another reason for Isaac’s growth is its constant endeavour to identify new niche areas where it can extend its service. For
instance, it recently entered into the appliance service and gas fireplace installation market seeing the potential for growth
there.

While the success of Isaac is attributed to sheer hard work, it has been following some sound principles like:

Human Resources – The Right Choice:

The Isaac principle is simple ‘Altitude comes before Skills’. At Isaac they believe that it is easier to take a person with less
experience and train him than to take a person with bad attitudes and change him. Isaac stresses on hiring people with the
right attitudes, as the employees, especially the technicians, directly interact with customers. (They make service calls at
the customer homes.) Nothing can damage Isaac’s reputation more than customers having to deal with technicians with
bad attitudes.

Isaac has set up a training centre called Isaac University. This training centre is accessible to all employees of Isaac. The
centre provides, sessions on various aspects ranging from hard-core technical training to important soft skills inputs.

Employees can put off customers by dirtying up their homes or messing up their lawns during a service call. Soft skills are
therefore a major focus of the training centre. It provides technicians inputs for making service calls in a pleasant and
impressive manner. For Isaac, a service call is more about serving the customer satisfactorily than about repairing
something that has broken down.
Apart from the training provided in the Isaac University, employees are also provided an opportunity to undergo external
industry training. Employees are even paid for undergoing this industry training. Recently, Isaac’s service technicians
underwent training on motivation, leadership and empowerment. Consequently, the management at Isaac does not have
to deal with the routine operational issues. Employees sort it out themselves.

The industry connection:

Isaac also attributes its success to its being connected and involved with various industry associations and groups. Jim
Isaac the CEO was on the board of the Air Conditioning Contractors Of America (ACCA) for 13 years, being its National
president in 1990. Jim believes that people can gain a lot of insights, just by being connected and involved with such
groups. These groups often provide inputs in areas like best practices, better financial management and effective handling
of regulatory issues.

Marketing and advertising -The name of the game:

Despite being a contractor, Isaac realises that advertising and marketing are vital aspects that make its business grow.
Even as early as the 1970’s Isaac ran TV ads promoting the company and its services. Its marketing department has a
special budget to continuously promote Isaac and its services.

Isaac is promoted through different mediums including TV, billboards, company trucks and uniforms. It owns an ice-
resurfacing machine that it leases out to spruce up the ice sport fields that are used for various events like ice hockey,
skating and so on. The ice resurfacer, which has the name of Isaac marked on its side, acts as a good medium for
advertisement during such events.

Isaac follows up with its customer through its telemarketing activity. It is one company that most people in their area of
operation recall when asked to name an HVAC company.

Employee Friendly – The Ultimate:

Isaac emphasises that employees joining them don’t just have a job, but a career. It provides employees the freedom to
try something new. For instance, the emergency department that is available on call, 24 hours a day was an employees’
idea. It provides its employees the chance to rise through the ranks in the organisation. Isaac believes in treating people
with respect, be it employees or customers. The employees in turn treat each other, their subordinates and their
customers with the same respect that is showered on them.

Employees working in Isaac can choose from over eight different health plans. They are also offered an attractive profit
sharing plan.

For a company that has managed to grow steadily for the last 56 years, the task ahead is clear but challenging.
Maintaining the high standards that Isaac has set in the past is the surest way for it to continue growing. To the third
generation Isaacs, who are currently involved in managing the company, this might be the best legacy they could leave.

Online Navigator > Concept

A list of online links outlining Deming’s teachings and principles.

1. The Deming Guide to Quality

This white paper provides a brief on the Deming’s 14 points.
http://www.bvwglobal.com/BvWi/BvW_White%20Paper_Deming.pdf

2. Deming’s 14 points for management

This PDF on Deming’s 14 points provides an in-depth explanation of 14 points along with illustrations.
http://www.stat.auckland.ac.nz/~mullins/quality/Deming.pdf

3. The model for improvement

This PDF presentation outlines the PDCA cycle as a method to adapt, implement and establish change.
http://www.vhqc.org/Hospitals/session1/PPmodel3PDF.pdf

4. Using “Four days with Dr. Deming” to train organisations

Dr. Deming seminars popularly came to be known as “Four days with Dr. Deming”. There can be no alternative for
personally attending Dr. Deming’s 4-day seminar. But this PDF takes one very close to experiencing the seminar. It
focuses on delivering Deming’s management ideas in a corporate setting.
http://deming.eng.clemson.edu/pub/den/4day_guide.pdf

5. Dr. Deming’s cure for a sick system

Understanding a concept leads to its better application. Hence it is essential to understand Deming’s philosophy to
effectively apply it. Though Deming’s concept is a life long learning, the first step is to root out the five C’s that most
organisations suffer from. This PDF document explains these five C’s that hinder an organisation’s growth.
http://deming.eng.clemson.edu/pub/den/cure.pdf

6. Deming’s profound knowledge

Understanding a cause effect relationship is essential for constant improvement. A theory shows the cause effect
relationship and also predicts the results. This theory can then be tested and improved. This presentation outlines the
variation and theory of knowledge concepts of the Deming management method.
http://courses.lib.odu.edu/commhealth/pstepano/profknow.ppt

7. Deming Dimension : Management for a better future

This PDF document is an inaugural professional lecture. It details the history and evolution of Deming management
method.
http://www.spcpress.com/ink_pdfs/Deming%20Dimension.pdf

8. Does anybody give a hoot to profit

This PDF document is an edited transcript of the presentation given by Dr. Deming to European executives. It also contains
a question and answer session.
http://www.deming.ch/downloads/deming_speech_en.pdf

9. Deming’s lecture to Japanese top management

This document is an English translation of the Japanese transcript of Dr. Deming’s lecture given to the Japanese top
management.
http://deming.eng.clemson.edu/pub/den/deming_1950.htm

10. Introduction to statistical quality control

This presentation outlines Deming’s 14 points, the total quality management concept along with a briefing on the statistical
methods used in quality control.
http://www.webster.edu/~pangasar/Shanghai/PresentationS2c.ppt

Continue:
Online Links To Tools

Online Navigator > Tools

Deming insisted on the importance of applying statistical tools for improving quality. Following are some links relating to
the application of statistical tools:

1. TQM – problem solving strategies

This presentation discusses the principles of Deming, Juran, Ishikawa, Crosby and Oakland. It also briefs about the PDCA
cycle and cause-effect diagram.
http://infocom.cqu.edu.au/Courses/2002/T2/STAT12049/Resources/Lecture_Slides/Lecture_3.ppt

2. Statistical applications in Quality

This presentation outlines Deming’s concept of PDCA, and his 14 points. It also focuses on the application of the Control
chart, P-chart, R-chart, Mean chart and Process capability.
http://cba.fiu.edu/dsis/farberm/ppt/CHAP12.PPT

3. How do world class organisations use statistics ?

Statistical techniques are a part of present day quality management. Statistical techniques give concrete information about
the organisation’s performance. This information makes it easier to pin down the areas that need improvement. This paper
outlines the elements for an ideal implementation of these statistical techniques.
http://stat.bus.utk.edu/techrpts/1998/98-02.pdf

4. Probing process analysis

According to Deming it is essential to understand variation and its causes for effective quality management. This PDF
document provides the steps in single wafer probing analysis for its continuous improvement.
http://www.swtest.org/swtw_library/2000proc/PDF/S10_Strom.pdf

5. Data Sanity: Statistical thinking applied to everyday data

Organisations acknowledge the significance of statistical approach to quality control. But its importance is not reflected in
the work environment. Statistics in an organisational environment is quite different from the academic world of statistics.
This PDF makes an in-depth analysis of statistical thinking that ensures better organisational performance.
http://www.fpd.finop.umn.edu/groups/conference/documents/presentation/data_sanity.pdf
Continue:
Online links to Additional Reading

Online Navigator > Additional reading

Some additional links related to Deming's management principles.

1. Business performance improvement process

Dr. Deming stated that every business is a set of processes that are interdependent. Any problem that arises is due to the
variation in the performance of these processes. Organisations hoping to sustain and succeed must identify the key
processes that affect the output, and focus on improving them. This PDF focuses on theory of knowledge that is applied to
business process improvements.
http://www.suppliermanager-online.com/SABRe/pages/index_home.htm

2. A different perspective on quality

This is a keynote presentation that addresses Dr. Deming’s variation and Gregory Bateson’s sustainability.
http://deming.ces.clemson.edu/pub/den/archive/97.12/msg00055.html

3. Tools of creativity in quality management

This PDF document focuses on the importance of creativity in the field of quality management.
http://deming.eng.clemson.edu/pub/den/plesk_01.pdf

4. Deming glossary
This PDF document contains the terms used in Deming management.
http://www.gaia.es/tqmnet/documen/Glosary.PDF

5. Environment management systems

This PDF document is in a presentation format. It outlines the relationship between the ISO 14001 and the different stages
of a PDCA cycle.
http://www.google.co.in/search?q=cache:RBE1RZ7x-W8J:www.sustainabilitysolutions.com.au/ISO14001.htm+
%22relationship+between+ISO+14001+and+%22PDCA+cycle%22%22&hl=en&start=3&ie=UTF-8
Top

Service Providers > Deming Institutes And Resource Providers

Given below is a list of institutes and resource providers with a brief on each of them as posted in their websites.

1. W. Edwards Deming Institute

http://www.deming.org/
The W. Edwards Deming Institute® is a nonprofit organisation that was founded in 1993 by noted consultant Dr. W.
Edwards Deming. The aim of the Institute is to foster understanding of The Deming System of Profound Knowledge™ to
advance commerce, prosperity and peace.

2. The Deming Cooperative

http://www.deming.edu/CC/CCMain.html
The Deming Cooperative aims to provide information about programs, conferences, seminars, discussion groups,
consultants, literature, videos and materials that focus on the understanding, explanation and extension of the work of
Dr.W. Edwards Deming. A list of contacts and consultants in Japan and USA is provided.

3. The Deming Forum

http://www.deming.org.uk/
The Deming Forum, is an educational organisation, endorses the studying and application of the management philosophy
developed by Dr. W.E. Deming. It organises an annual conference, The Transformation Forum at which speakers from all
over the world give insights into Dr Deming's accepted wisdom and explain how Deming's approach has helped them
transform their own organisations.

This UK based educational organisation aims to provide and enable learning opportunities for those who wish to learn and
hone their understanding of the Deming philosophy.

4. The Swiss Deming Institute

http://www.deming.ch/
The Swiss Deming institute aims to enhance the understanding for the Deming Management Philosophy and the Deming
System of Profound Knowledge. It also offers training to offer possibilities for continual improvement.