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The Comparison of the Deming Prize and the Baldrige Award

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The Deming Prize


The Deming Prize is Japans national quality award for industry. It was established in 1951 by the Japanese Union of Scientists and engineers (JUSE) and it was named after W. Edwards Deming. He brought statistical quality control methodology to Japan after W.W.II. The Deming Prize is the worlds oldest and most prestigious of such awards. Its principles are a national competition to seek out and commend those organizations making the greatest strides each year in quality, or more specifically, TQC. The prize has three award categories. They are Individual person, the Deming Application Prizes, and the Quality Control Award for factory. The Deming Application prizes are awarded to private or public organizations and are subdivided into small enterprises, divisions of large corporations, and overseas companies. There are 143 companies who won the prize. Among them, only once has the Deming Prize been awarded to a non-Japanese company: Florida Power and Light in 1989.

Baldrige Award
The Baldrige Award was established in 1987 to promote quality awareness, understand the requirements for quality excellence, and share information about successful quality strategies and benefits. There are three eligibility categories: manufacturing, services, and small firms. Unlike the Deming Prize, public or not-for-profit organizations are not qualified. Also, there is no category in which all applicants that satisfy a given level of performance receive a quality prize. Since its foundation, there are only five companies who received this prize. According to its principles, the role of quality data collection and analysis as the basis for managerial decisions is paramount. Furthermore, quality efforts should not concentrate only on the elimination of defects but also encompass creative activities that will influence customer satisfaction. Among Baldrige winners, there are no service companies.

Check list of application for Deming Award - Policy


1. Policies pursued for management quality, and quality control 2. Method of establishing policies 3. Justifiability and consistency of policies 4. Utilization of statistical methods 5. Transmission and diffusion of policies 6. Review of policies and the results achieved 7. Relationship between policies and long- and short-term planning

Check list of application for Deming Award - Organization and its Management
1. Explicitness of the scopes of authority and responsibility 2. Appropriateness of delegations of authority 3. Interdivisional cooperation 4. Committees and their activities 5. Utilization of staff 6. Utilization of QC Circle activities 7. Quality control diagnosis

Check list of application for Deming Award - Education and Dissemination


1. 2. 3. Education programs and results Quality- and control-consciousness, degrees of understanding of quality control Teaching of statistical concepts and methods, and the extent of their dissemination Grasp of the effectiveness of quality control Education of related company (particularly those in the same group, sub-contractors, consigness, and distributers) QC circle activities System of suggesting ways of improvements and its actual conditions

4. 5.

6. 7.

Check list of application for Deming Award Collection, Dissemination and Use of Information of Quality

1. Collection of external information 2. Transmission of information between divisions 3. Speed of information transmission (use of computers) 4. 4. Data processing statistical analysis of information and utilization of the results

Check list of application for Deming Award - Analysis


1. 2. 3. 4. 5. 6. 7. Selection of key problems and themes Propriety of the analytical approach Utilization of statistical methods Linkage with proper technology Quality analysis, process analysis Utilization of analytical results Assertiveness of improvement suggestions

Check list of application for Deming Award - Standardization


1. Systematization of standards 2. Method of establishing, revising, and abolishing standards 3. Outcome of the establishment, revision, or abolition of standards 4. Contents of the standards 5. Utilization of statistical methods 6. Accumulation of technology 7. Utilization of standards

Check list of application for Deming Award - Control


1. Systems for the control of quality and such related matters as cost and quantity 2. Control items and control points 3. Utilization of such statistical control methods as control charts and other statistical concepts 4. Contribution to performance of QC circle activities 5. Actual conditions of control activities 6. State of maters under control

Check list of application for Deming Award - Quality Assurance


1. 2. 3. 4. Procedure for the development of new products and services (analysis and upgrading of quality, checking of design, reliability, and other properties) Safety and immunity from product liability Customer satisfaction Process design, process analysis, and process control and improvement Process capability Instrumentation, gauging, testing, and inspecting Equipment maintenance, and control of subcontracting, purchasing, and services Quality assurance system and its audit Utilization of statistical methods Evaluation and audit of quality Actual state of quality assurance

5. 6. 7.
8. 9. 10. 11.

Check list of application for Deming Award - Results


1. Measurements of results 2. Substantive results in quality, services, delivery time, cost, profits, safety, environments, etc. 3. Intangible results 4. Measures for overcoming defects

Check list of application for Deming Award - Planning for the Future
1. Grasp of the present state of affairs and the concreteness of the plan 2. Measures for overcoming defects 3. Plans for further advances 4. Linkage with the long-term plans

Check list of application for Malcom Baldrige National Quality Award


Maximum score Percentage of sub-total 1.0 1.1 1.2 1.3 1.4 1.5 Leadership Leadership of top-ranking managers Policy Management control system and quality improvement process Allocation and utilization of resources Responsibility to society 50 30 30 20 10 15%

1.6
2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Unique and creative leadership technique


Information and analysis Utilization of analysis technique or system utilization of information about product quality and servicing quality Customer data and analysis Analysis of quality and data of subcontractor Analysis of quality and data of distributor or sales agent Employee-related data and analysis Unique and innovative analysis of information

10
7.50% 15 10 20 10 10 5 5

Check list of application for Malcom Baldrige National Quality Award, 2


3.0 3.1 3.2 3.3 3.4 4.0 4.1 4.2 4.3 4.4 4.5 Quality of strategy planning Operation target and strategy target Function of planning Quality improvement plan Unique and innovative planning for strategy Utilization of human resources Control and operation Quality-consciousness and participation of employees Training and education concerning quality Personnel assessment, motivation, award system Unique and innovative strategy concerning utilization of human resource 30 50 30 30 10 20 20 30 5 15% 7.50%

Check list of application for Malcom Baldrige National Quality Award, 3


5.0 Quality assurance of product and servicing 15% 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 Reflection of customers opinion on product and servicing Development of new product and new servicing Design of new product and new servicing measurement, standardization, data system Engineering Audit Recording Safety, health and sanitation, environment Assurance/effectiveness 20 20 30 10 10 15 10 10 15

5.10 Unique and innovative approach to quality assurance of product and servicing 10

Check list of application for Malcom Baldrige National Quality Award, 4


6.0 Result of quality assurance of product and servicing 10%

6.1
6.2 6.3 6.4 6.5 7.0 7.1 7.2 7.3 7.4 7.5

Reliability and achievement of product and servicing


Reduction of scrap, rework, rejection concerning product and servicing Reduction of complaint and claim suit concerning quality Reduction of assurance- or site-related assistance operation Innovative index and economic gain for quality improvement Customer satisfaction Quality of product and servicing from customers viewpoint Comparison of competitiveness of product and servicing Customer servicing and countermeasure for complaint Assurance from customers viewpoint Unique (or innovative) technique to grasp customer satisfaction Total

25
20 25 20 10 30% 100 50 75 50 25 1000 100%

Eight Critical Factors


A plan to keep improving all operations continuously A system for measuring these improvements accurately A strategic plan based on benchmarks that compare the companys performance with the worlds best A close partnership with suppliers and customers that feeds improvements back into operations A deep understanding of the customers so that their wants can be translated into products A long-lasting relationship with customers, going beyond the delivery of the product to include sales, service, and ease of maintenance A focus on preventing mistakes rather than merely correcting them A commitment to improving quality that runs from the top of the organization to the bottom

Comparison of the Deming Prize and Baldrige Award


Topic Baldrige Award Deming Prize

Definition of Quality Primary Focus


Overall Approach Purpose Types of Organization Orientation Scoring Weight Consideration Information Management Continuous of the award Winners Scope Applications Grading time First Award Sponsor

customer-driven quality it views quality as defined by the customer customer satisfaction and quality
quality of management promote competitiveness through total quality management manufacturing, service and small business 60% result, 40% process different weight for each criteria less concern heavily concern N/A Maximum of two per category U.S. firms only $2500 and 75 pages packet six months 1987 National Institutes Standards and Technology

conformance to specifications it views quality as defined by the producers statistical quality control
management of quality promote quality assurance through statistical techniques essentially private or public manufacturing 60% process, 40% results equal weight in 10 criteria concern in productivity, delivery, safety, and environment less concern Japan Quality Control Medal All firms meeting standard Firms for any country 1000 pages and one year working with consultant from the union of Japanese Scientist & Engineers one year 1951 Union of Japanese Scientists and Engineers

Comparison of the Deming Prize and Baldrige Award, 2


Topic Grading Criteria Baldrige Award 1. Leadership of top-ranking managers policy Deming Prize 1. Policy and Objectives pursued for management quality & QC method of establishing quality

management control system & quality improvement process


allocation and utilization of resources responsibility to society

justifiability and consistency of policies


review of policies and the result achieved relationship between policies and long term & short term planning

unique and creative leadership technique

Comparison of the Deming Prize and Baldrige Award, 3


Topic Grading Criteria Baldrige Award 2. Information and Analysis Deming Prize 2. Organization and its Management explicitness of the scopes of authority and responsibility interdivisional cooperation

utilization of analysis technique or system utilization of information about product quality and servicing quality customer data and analysis analysis of quality and data of subcontractor and distributor or sales agent

committees and their activities utilization of staff

utilization of QC Circle activities QC diagnosis

Comparison of the Deming Prize and Baldrige Award, 4


Topic Grading Criteria Baldrige Award 3. Quality of Strategy Planning Deming Prize 3. QC Education and dissemination education program and results degrees of understanding of

operation target and strategy target function of planning quality improvement plan

teaching of statistical concepts and methods QC grasp of the effectiveness of

unique and innovative planning for strategy

QC circle activities

system of suggesting ways of improvements and its actual conditions

Comparison of the Deming Prize and Baldrige Award, 5


Topic Baldrige Award Deming Prize

Grading Criteria

4. Utilization of Human Resource


control and operation

4. Collection, Dissemination and Use of Information on Quality


collection of external information transmission of information between divisions speed of information transmission data processing, statistical analysis of information and utilization of the results

quality consciousness and participation of employees training and education concerning quality personnel assessment, motivation, award system innovative strategy concerning utilization of human resource

Comparison of the Deming Prize and Baldrige Award, 6


Topic Grading Criteria Baldrige Award 5. Quality Assurance of Product and Servicing reflection of customers opinion on product and servicing design and development of new product and new servicing Deming Prize 5. Analysis

selection of key problems and themes propriety of the analytical approach

measurement, standardization, utilization of statistical data system methods engineering, audit, recording linkage with proper technology quality analysis, process analysis utilization of analytical results

safety, health and sanitation, ,environment approach to quality assurance of product and servicing

assertiveness of improvement suggestions

Comparison of the Deming Prize and Baldrige Award, 7


Topic Grading Criteria Baldrige Award 6. Result of Quality Assurance of Product and Servicing Deming Prize 6. Standardization systematization of standards

reliability and achievement of product and servicing reduction of scrap, rework, rejection, concerning product and servicing reduction of complaint and claim suit concerning quality innovative index and economic gain for quality improvement

method of establishing, revising, and abolishing standards and their outcome utilization of statistical methods contents of the standards

accumulation of technology utilization of standards

Comparison of the Deming Prize and Baldrige Award, 8


Topic Grading Criteria Baldrige Award 7. Customer Satisfaction Deming Prize 7. Control

quality of product and system for the control of servicing from customers viewpoint quality and related matters
comparison of competitiveness of product and servicing customer servicing and countermeasure for complaint assurance from customers viewpoint technique to grasp customer satisfaction control items and control points utilization of such statistical control methods as control charts and other statistical concepts contribution to performance of QC circle actual conditions of control activities

Comparison of the Deming Prize and Baldrige Award, 9


Deming Prize Deming Prize 9. Results measurement of results

8.

Quality Assurance

procedure for the development of new products and services

safety and immunity from product liability


customer satisfaction

substantive results in quality, services, delivery time, cost, profits, safety environments intangible results

process design, analysis, control and improvement


process capability

measures for overcoming defects

10. Planning for the Future grasp of the present state of affairs and the concreteness of the plan

instrumentation, gauging, testing and inspecting


equipment maintenance and control of subcontracting, purchasing, and services

measures for overcoming defects


plans for further advances linkage with the long term plans

THE 2001 MALCOLM BALDRIGE NATIONAL QUALITY AWARD REGIONAL CONFERENCES


Executives from many of the Award recipient organizations will share their knowledge and insights to help you improve your organizations quality efforts The 2000 Award Recipients: Award Recipients will be announced in midNovember 2000, and the recipients will participate in the 2001 Regional Conferences. The recipients could include, for the first time, education and health care organizations.

THE 2001 MALCOLM BALDRIGE NATIONAL QUALITY AWARD REGIONAL CONFERENCES, 2

Motorola (1998)
1. In the past five years, Motorola has reduced its defect rate in manufacturing 99.5%, generating cost savings estimated at about $900 million this year, and $3.1 billion cumulatively. Motorolas prices fall an average of 8-12 percent a year; its cellular phone prices 25% a year.

2.

3.

Minority report program. Employees can file a report if they feel that their ideas are not being supported. An example is the concept behind the microprocessor 68000 series which later became the brains of Apples Macintosh line. In 1987, Motorola announced two productivity goals: to reduce manufacturing defects by 90% every two years, and reduce cycle (new product development) time by 90% every five years.

4.

Eastman Chemical Company


1. Eastman is well accepted by its surrounding communities and has a strong environmental record. Safety serves as a driving force. The company earned inclusion in OSHAs voluntary Star Program. 2. Eastman averaged 22 % of sales from new products commercialized within the last five years, compared to an average of 11% for 13 leading chemical companies, twice the average in a recent study. 3. Eastman has adopted a no-fault return policy on its plastic products and states a customer may return any product for any reason. This policy is believed to be the only one of its kind in the chemical industry. 4. Over the past four years, more than 70% of Eastmans worldwide customers rated Eastman their number one supplier. For the last seven years, Eastman has been rated outstanding in five important customer factors-product quality, product uniformity, supplier integrity, correct delivery, and reliability. Shipping reliability consistently has been near 100% for the last four years. 5. Eastmans new product development practices are ranked second among a group of 13 leading chemical companies. 6. Eastman uses multiple approaches to drive continuous process improvement through an interlocking team structure that involves virtually every employee in the teaming and quality improvement process. 7. Data use is deployed widely, with virtually all employees using data to track their individual and/or their teams performance. 8. Eastman has a fully integrated planning process that systematically deploys the key business priorities to all employees and all work groups throughout Eastmans innovative four-dimensional organizational structure.

Quality Achievements

Ames
1. Every teammate at Ames is a member of at least one involvement group dedicated to quality improvement. The company currently has 40 of these groups.

2. The percentage of defective parts reaching customers is among the lowest in the industry. For Ames largest customer, the defect rate has been reduced since 1989 from more than 30,000 parts per million to 11.
3. Productivity, as measured by sales per employee, increased by 48% from 1987 to 1992. 4. Over the past five years, teammate ideas have saved the company and its customers more than $3 million and will average over $2,700 per teammate in 1993. 5. Ames product warranties are among the best in the industry and include a comprehensive warranty for prototypes, which refunds development costs if specifications are not achieved. 6. Ames has developed a consolidated supplier base be selecting suppliers who share the companys quality values and are responsive to its established continuous improvement goals. Down from 42 key suppliers in 1989, Ames Rubber Corp. now relies on 19 suppliers whose quality performance is about 99%.

Impact of Quality Improvement on Business Performance


Performance Indicators No. of Responding companies 12 9 6 8 7 9 5 9 11 11 14 7 14 6 10 11 12 9 8 Direction of Indicator positive (favorable) 12 8 6 7 6 6 5 8 8 7 11 5 12 5 4 9 12 7 6 negative (unfavorable) 0 1 0 0 0 1 0 1 0 3 3 2 0 1 2 2 0 2 2 no change Average annual positive performance improvement 11.3 4.7 12.0 10.3 5.8 7.2 9.0 1.4 0.1 6.0 1.8 16.6 2.5 11.6 1.0 13.7 8.6 1.3 0.4

a. Operating Measures Reliability Timeliness of delivery Order processing time Errors or defects Product lead time Inventory turnover Costs of quality a.Employee-related measures Employee satisfaction Attendance Turnover Safety/health Suggestions received a.Customer Satisfaction Overall customer satisfaction Customer complaints Customer retention a. Financial Performance Market share Sales per employee Return on assets Return on sales

0 0 0 1 1 2 0 0 3 1 0 0 2 0 4 0 0 0 0

Source: Adapted from U.S. General Accounting Office, Management Practices: U.S. Companies Improve Performance Through Quality Efforts , Washington, 1991, pp. 18-28.

SPRING 1993

Result

1. 2. 3. 4. 5. 6. 7.

Increased Customer Satisfaction Lower Costs Reduced Product Development Time Increased Employee Satisfaction Higher Quality Products Innovation Increased Productivity

Average Category Scores


100 90 80 70 60 50 40 30 20 10 0 0
Sue Rohan, David Luthy Education Pilot Program Overview

Percent

SVC ED

Categories

Average Category Scores


100 90 80 70 60 50 40 30 20 10 0 0
Sue Rohan, David Luthy Education Pilot Program Overview

Percent

HE K-12

Categories

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