Deming’s Principles Today

Delivering better products or services to customers is the undisputed aim of any organization. They just don’t always act that way. Manufacturing organizations have circled the wagons since the 1950s, when Japanese competitors began capturing market share from the rest of the world.

Looking back at the history of the quality and improvement movement, you can see the wake left through which we’ve traveled. In the book, The Man Who Discovered Quality (Penguin Books, 1992), author Andrea Gabor allows us to go back in time to see the dire straits faced by manufacturing in the United States. The story of Nashua Corp. during the 1980s paints a bleak picture.

At that time, Nashua made carbonless paper for U.S. industry. As it began to export internationally, the company discovered that its quality wasn’t good enough to compete with Japanese firms, which had moved in with a better quality product and thereby captured the market. What stupefied William Conway—CEO of Nashua—were the hurdles that the Japanese had to clear just to be competitive.

“The Japanese had to purchase the paper in the United States and ship it back to Japan for processing,” says Conway. “Then, for shipments going to Europe, the Samurai paper mills shipped their stock across the Sea of Japan to Vladivostok, where it was loaded on to railcars for the 10,000-mile journey on the Trans-Siberian railroad to Leningrad, from whence it was distributed to Europe. In three or four years, they took 25 percent of the premium market.”

As Conway further lamented, “And here we are 150 miles from the trees in Maine, and by the time we’d taken the paper and coated it, we couldn’t be competitive in either cost or quality.”

W. Edwards Deming, the subject of Gabor’s book, would talk about how Japan would buy scrap metal in the United States for pennies a pound and sell it back to U.S. companies in the form of other products for multiple dollars a pound. Can anyone say “trade deficit?”

This story illustrates how bad things had gotten in the United States. Only the pressure from a strong competitor led Nashua to investigate and adopt statistical quality control (SQC). It’s when you have a poor competitor that you can be lulled to sleep, or you imagine yourself at the top of a bad heap. You would suspect this is what is still happening in the U.S. service industry today.

It is important to note that the Japanese became successful in many manufacturing industries—and not just Toyota in the automotive realm. By 1965, Japanese industries led in steel, automobiles, cameras, consumer electronics, motorcycles, optical instruments, pianos, and watches. Deming’s delivery of SQC to the Japanese was a differentiator. Today, you would be hard-pressed to find a manufacturer not using SQC.

Today, efficiency reigns supreme in the quality and improvement world. The problem is that effectiveness is what’s needed. You gain efficiency when you focus on process and productivity. Effectiveness comes from management, and here the western world has failed. As Russell Ackoff once said, “We are doing the wrong thing righter,” which is not the same as doing the right thing.

Deming told Conway that he (Conway) had to lead the quality effort at Nashua by using SQC himself and demanding it from others. How many CEOs today actually know what a control chart is, or have even seen one, for that matter?

Management needs to be squarely in the crosshairs of improvement professionals. The efficiency train has taken us as far as it can. The financially focused, interchangeable management structure needs to find an off-ramp, and customer-focused management needs to find the on-ramp.

We need to be sure that the next generation of managers and workers won’t tolerate the legacy thinking that has prevailed since the days of Frederick Taylor and scientific management. The Deming Institute wants to be sure that the principles of Deming are not foreign to these forthcoming leaders.

I am discussing topics relevant to current as well as future generations of quality professionals in a series of podcasts produced by the Deming Institute. During the podcasts I interview members of the institute’s advisory board about how Deming’s principles are being used today in industry, government, and education. If you would like more information about how these principles are being applied, be sure to tune in.

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