The Comparison of the Deming Prize and the Baldrige Award

- Handouts 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-forprofit 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

Item
1. Policy

2. Organization and
its Management

3. Education and
Dissemination

Particulars
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
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

Item
6. Standardization

Particulars
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

7. Control

1.

1.
2.

8. Quality
Assurance

3.
4.
5.

6.
7.

4. Collection,
Dissemination
and Use of
Information of
Quality

1.
2.

Education programs and results

Quality- and controlconsciousness, 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

Collection of external information

9. Results
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
5. Analysis
1.
Selection of key problems and
10. Planning for
themes
the Future
2.
Propriety of the analytical
approach
3.
Utilization of statistical methods
4.
Linkage with proper technology
5.
Quality analysis, process analysis
6.
Utilization of analytical results
7.
Assertiveness of improvement
suggestions
Edited by Subcommittee of Implementation Award for Deming Prize, 1992 Revision.

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
1.
Procedure for the development of new
products and services (analysis and
upgrading of quality, checking of design,
reliability, and other properties)
2.
Safety and immunity from product
liability
3.
Customer satisfaction
4.
Process design, process analysis, and
process control and improvement
5.
Process capability
6.
Instrumentation, gauging, testing, and
inspecting
7.
Equipment maintenance, and control
of subcontracting, purchasing, and
services
8.
Quality assurance system and its audit
9.
Utilization of statistical methods
10. Evaluation and audit of quality
11. Actual state of quality assurance
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
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
1.0 Leadership
150
1.1
Leadership of top-ranking managers
50
1.2
Policy
30
1.3
Management control system and quality improvement process
30
1.4
Allocation and utilization of resources
20
1.5
Responsibility to society
10
1.6
Unique and creative leadership technique
10
2.0 Information and analysis
75
2.1
Utilization of analysis technique or system
15
2.2
utilization of information about product quality and servicing quality
10
2.3
Customer data and analysis
20
2.4
Analysis of quality and data of subcontractor
10
2.5
Analysis of quality and data of distributor or sales agent
10
2.6
Employee-related data and analysis
5
2.7
Unique and innovative analysis of information
5
3.0 Quality of strategy planning
75
3.1
Operation target and strategy target
20
3.2
Function of planning
20
3.3
Quality improvement plan
30
3.4
Unique and innovative planning for strategy
5
4.0 Utilization of human resources
150
4.1
Control and operation
30
4.2
Quality-consciousness and participation of employees
50
4.3
Training and education concerning quality
30
4.4
Personnel assessment, motivation, award system
30
4.5
Unique and innovative strategy concerning utilization of human resource
10
5.0 Quality assurance of product and servicing
150
5.1
Reflection of customers opinion on product and servicing
20
5.2
Development of new product and new servicing
20
5.3
Design of new product and new servicing
30
5.4
measurement, standardization, data system
10
5.5
Engineering
10
5.6
Audit
15
5.7
Recording
10
5.8
Safety, health and sanitation, environment
10
5.9
Assurance/effectiveness
15
5.10
Unique and innovative approach to quality assurance of product and servicing

Percentage
of subtotal
15%

7.5%

7.5%

15%

15%

10
6.0 Result of quality assurance of product and servicing
100
6.1
Reliability and achievement of product and servicing
25
6.2
Reduction of scrap, rework, rejection concerning product and servicing
20
6.3
Reduction of complaint and claim suit concerning quality
25
6.4
Reduction of assurance- or site-related assistance operation
20
6.5
Innovative index and economic gain for quality improvement
10
7.0 Customer satisfaction
300
7.1
Quality of product and servicing from customers viewpoint
100
7.2
Comparison of competitiveness of product and servicing
50
7.3
Customer servicing and countermeasure for complaint
75
7.4
Assurance from customers viewpoint
50
7.5
Unique (or innovative) technique to grasp customer satisfaction
25
Total
1000

10%

30%

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
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
Grading Criteria

Baldrige Award
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

Deming Prize
conformance to specifications it views quality as
defined by the producers
statistical quality control
management of quality
promote quality assurance through statistical techniques

60% result, 40% process

different weight for each criteria
less concern
heavily concern

60% process, 40% results

equal weight in 10 criteria
concern in productivity, delivery, safety, and environment
less concern

N/A

Japan Quality Control Medal

Maximum of two per category

U.S. firms only
$2500 and 75 pages packet

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
1. Policy and Objectives
pursued for management quality & QC
method of establishing quality
justifiability and consistency of policies
review of policies and the result achieved

six months
1987
National Institutes Standards and Technology
1. Leadership
of top-ranking managers
policy
management control system & quality
improvement process

essentially private or public manufacturing

Topic

Baldrige Award
allocation and utilization of resources
responsibility to society
unique and creative leadership technique

Deming Prize
relationship between policies and long term & short
term planning

2. 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 and
distributor or sales agent

2. Organization and its Management

explicitness of the scopes of authority and
responsibility
interdivisional cooperation
committees and their activities
utilization of staff
utilization of QC Circle activities
QC diagnosis

3.

Quality of Strategy Planning

operation target and strategy target
function of planning
quality improvement plan
unique and innovative planning for strategy

3.

Education and dissemination

education program and results
degrees of understanding of QC
teaching of statistical concepts and methods
grasp of the effectiveness of QC
QC circle activities
system of suggesting ways of improvements and its
actual conditions

4. Utilization of Human Resource

control and operation
quality consciousness and participation of
employees
training and education concerning quality
4. Collection, Dissemination and Use of Information on
Quality
personnel assessment, motivation, award system

collection of external information

innovative strategy concerning utilization of
transmission of information between divisions
human resource
speed of information transmission
5. Quality Assurance of Product and Servicing
data processing, statistical analysis of information and

Topic

Baldrige Award
reflection of customers opinion on product and
servicing
design and development of new product and
new servicing
measurement, standardization, data system
engineering, audit, recording
safety, health and sanitation, ,environment
approach to quality assurance of product and
servicing
6. Result of Quality Assurance of Product and
Servicing
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
7. 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

Deming Prize
utilization of the results
5.

Analysis
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

6. Standardization
systematization of standards
method of establishing, revising, and abolishing
standards and their outcome
utilization of statistical methods
contents of the standards
accumulation of technology
utilization of standards
7.

Control
system for the control of quality and related matters
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

Topic

Baldrige Award
technique to grasp customer satisfaction

Deming Prize
8. Quality Assurance
procedure for the development of new products and
services
safety and immunity from product liability
customer satisfaction
process design, analysis, control and improvement
process capability
instrumentation, gauging, testing and inspecting
equipment maintenance and control of subcontracting,
purchasing, and services
9. Results
measurement of results
substantive results in quality, services, delivery time,
cost, profits, safety environments
intangible results
measures for overcoming defects
10. Planning for the Future
grasp of the present state of affairs and the
concreteness of the plan
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 mid-November 2000, and the recipients will
participate in the 2001 Regional Conferences. The recipients could include, for the first
time, education and health care organizations.
Previous Baldrige Award Recipients:
1999

1998

1997

1996

1995

1994

BI
The Ritz-Carlton Hotel
Company, LLC
STMicroelectronics, Inc.
Regions Americas
Sunny Fresh Foods

Service
Service

1993

Ames Rubber Corporation

Eastman Chemical Company

Small Business
Manufacturing

Manufacturing

1992

Manufacturing

Boeing Airlift & Tanker

Programs
Solar Turbines Inc.
Texas Nameplate Company,
Inc.

Manufacturing

3M Dental Products
Division
Merrill Lynch Credit Corp.
Solectron Corp.
Xerox Buss. Services

Manufacturing

ADAC Laboratories
Custom Research Inc.
Dana Commercial Credit
Corporation
Trident Precision
Manufacturing, Inc.

Manufacturing
Small Business
Service

AT&T Network Systems

Group Transmission
Systems Business Unit
(now part of Lucent
Technologies, Inc. Optical
Networking Group)
AT&T Universal Card
Services (now part of
Citigroup)
Granite Rock Company
The Ritz-Carlton Hotel
Company
Texas Instruments Inc.
Defense Systems &
Electronics Group (now
part of Raytheon Systems
Company)

1991

Marlow Industries, Inc.

Solectron Corporation
Zytec Corporation (now part
of Artesyn Technologies)

Small Business
Manufacturing
Manufacturing

1990

Cadillac Motor Car Company

Federal Express Corporation
IBM Rochester

Manufacturing
Service
Manufacturing

1989

Milliken & Company

Xerox Corporation Business
Products & Systems

Manufacturing
Manufacturing

1988

Globe metallurgical Inc.

Motorola, Inc.
Westinghouse Electric
Corporation Commercial
Nuclear Fuel Division

Small Business
Manufacturing
Manufacturing

Amstrong World Industries,

Inc.
Building Products
Operations
Corning Inc.
Telecommunications
Products Division
AT&T Consumer
Communications
Services (now the
Consumer Markets
Division of AT&T)
GTE Directories
Corporation Service (now
part of Verizon
Communciations)
Wainwright Industries, Inc.

Small Business

Manufacturing
Small Business

Service
Manufacturing
Service

Small Business

Manufacturing
Manufacturing
Serivce

Small Business

Service
Small Business
Service
Manufacturing

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.
2. Motorolas prices fall an average of 8-12 percent a year; its cellular phone prices
25% a year.
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.
4. 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.

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%.

Table 1
Impact of Quality Improvement on Business Performance
Performance Indicators

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

No. of
Responding
companies

Direction of Indicator
positive
negative
no change
(favorable) (unfavorable)

Average annual
positive
performance
improvement

a.

12
9
6
8
7
9
5

12
8
6
7
6
6
5

0
1
0
0
0
1
0

0
0
0
1
1
2
0

11.3
4.7
12.0
10.3
5.8
7.2
9.0

9
11
11
14
7

8
8
7
11
5

1
0
3
3
2

0
3
1
0
0

1.4
0.1
6.0
1.8
16.6

14

12

2.5

6
10

5
4

1
2

0
4

11.6
1.0

11
12
9
8

9
12
7
6

2
0
2
2

0
0
0
0

13.7
8.6
1.3
0.4

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. Increased Customer Satisfaction
2. Lower Costs
3. Reduced Product Development Time
4. Increased Employee Satisfaction
5. Higher Quality Products
6. Innovation
7. Increased Productivity

Percent

Average Category Scores

100
90
80
70
60
50
40
30
20
10
0

SVC
ED

Categories

Sue Rohan, David Luthy

Education Pilot Program
Overview

Percent

Average Category Scores

100
90
80
70
60
50
40
30
20
10
0

HE
K-12

Categories
Note: Categories 5.0 and 7.0 show significant differences.
Sue Rohan, David Luthy
Education Pilot Program
Overview