A Statistician who did everything right... err... except

The man I am talking about is William Edwards Deming (1900-1993), an American statistician widely regarded for improving production in the U.S. during World War II and was responsible (followed by Joesph M. Juran) for "quality" shooting through the roof in Japan, after it rose from ashes of the mushroom cloud. The JUSE (Japanese Union of Scientists and Engineers) offered him LOTS of money which he refused, hence the Deming Prize (awarded to a company/individual for contribution to the advancement of quality, but them being Japanese, it is mostly within the country).

Aside: I don't know why he was called a statistician, because his bachelors was in Electrical Engineering and his MS & PhD were in Mathematics and Mathematical Physics, well he taught Statistics in NYU's Graduate School of Business Administration, but since when do MBAs know about statistics except mean, median and mode. Nevermind........

Deming met Walter A Shewart (the pioneer of the concepts of statistical quality control to industrial production and management) at Bell Laboratories in 1927, was greatly inspired by him, and finally led to the Deming's Theory of Management (a staple course and Industrial Engineering and MBA).

Deming's fourteen principles for management

1. Create constancy of purpose for the improvement of product and service, with the aim to become competitive, stay in business, and provide jobs.
2. Adopt a new philosophy of cooperation (win-win) in which everybody wins and put it into practice by teaching it to employees, customers and suppliers.
3. Cease dependence on mass inspection to achieve quality. Instead, improve the process and build quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
5. Improve constantly, and forever, the system of production, service, planning, of any activity. This will improve quality and productivity and thus constantly decrease costs.
6. Institute training for skills.
7. Adopt and institute leadership for the management of people, recognizing their different abilities, capabilities, and aspiration. The aim of leadership should be to help people, machines, and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.
8. Drive out fear and build trust so that everyone can work more effectively.
9. Break down barriers between departments. Abolish competition and build a win-win system of cooperation within the organization. People in research, design, sales, and production must work as a team to foresee problems of production and use that might be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. Eliminate numerical goals, numerical quotas and management by objectives. Substitute leadership.
12. Remove barriers that rob people of joy in their work. This will mean abolishing the annual rating or merit system that ranks people and creates competition and conflict.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

He used the equation

Results of work effects
Quality = --------------------------------------------
Total Costs

and asked to focus on improving Quality, which means that ultimately costs are reduced, but companies focus on Costs and thus Quality is reduced.

Everybody consider these as a sure path for success. However, except the Japanese companies, where do we see them implemented?

On the contrary much furore was raised by Slaughter and Parker (possessed by the demons of Taylorism, Fredrick Winslow Taylor and Sloanism, Alfred Sloan), mind you there are good things about them too, reducing repetitive injuries, and.... and.... sorry, but I fail to remember any more. They said that the process should be client driven and Deming, for that matter even Crosby, Philip B. Crosby, Juran, Shewart etc. were stupid to concentrate on quality, not customer. Ahem... If I can see that in their papers and studies, mind you I am not an Industrial Engineering graduate, whats wrong with these guys.

For such a revolutionary statistician, failure came in the form of GM. GM "allegedly" followed the fourteen principles and built Pontiac Fiero in 1984. I say allegedly because they were not concentrating on Quality, they were keen on Costs and in any case the principles were not followed. According to the enquiry report one of the engineers knew that Fiero's engines had a good probability of catcing fire. And GM released the vehicle with the cars with a probability of 0.1-0.4 of catching a fire. I don't know how this is called as following the principles. But still many people argue that his principles failed (people get PhDs arguing for or against). Deming was a consultant at Ford in 1981 for quality, but he changed the way their management thought citing 82% of the problems as being with management and they beat GM and Chrysler year after year in sales because of him.

Failure came to him for something he was not even involved with.