W.

Edwards Deming: Father of System Improvement

W. Edwards Deming (1900–1993) was an American engineer, statistician, professor, author, lecturer, and
management consultant who specialized in efficiency and systems improvement. He got his PhD from
Yale University in Mathematical Physics. Deming said “put a good person in a bad system and the
system wins everytime.” He believed that efficiency isn’t just a matter of having good people but
of having good systems. Even if you have good people in a company or government they cannot be
effective within bad systems.

Deming is famous for rebuilding Japanese industry after WWII. His ideas created the Japanese post-
World War II economic miracle that helped Japan rise from bankruptcy to the world’s second largest
economy within only a decade. He is honored in Japan as the father of modern Japanese industry. What
Deming did for an entire country he also did for individual companies. For example, in 1981 Ford
Motor Company was suffering from $3 billion in losses. They hired Deming and he told Ford that their
management systems caused 85% of their problems.

Deming said that management should stop obssessing with short term quarterly dividends and start
focusing on innovative plans for long term business growth through improved products and services. "Long-
term commitment to new learning and new philosophy is required for management systems that seek
transformation. People that expect quick results are doomed to disappointment." Ford then restructured its
management systems and by 1986 it became the most profitable auto company in the country.

The Deming Improvement Philosophy:

Dr. W. Edwards Deming taught that by adopting certain principles of systems management, organizations
could increase quality and simultaneously reduce costs. They could reduce waste, rework, staff attrition and
litigation, and increase customer loyalty. The key was to practice continous improvement and think of a
company’s operations as a whole connected system.

Deming taught CANEI- Constant And Never Ending Improvement. His method emphasized certain
“Key Principles for Managers for Transforming Business Effectiveness.” These later influenced the launch
of the Total Quality Management movement. Some of the principles are:

1. Constantly focus on improvement of products and services, with the aim to stay competitive,
stay in business and provide jobs.
2. Constantly improve the system of production and service, to improve quality and productivity, and thus
constantly decrease costs.
3. Eliminate fear of innovation so that everyone may work effectively for the company. Break down
barriers between departments so people in research, design, sales, and production work as a team.

Some dangers companies should avoid:

1. Lack of constancy of purpose. 2. Emphasis on short-term profits only. 3. Running a company on visible
figures alone. 4. Neglecting long-range planning. 5. Placing blame on workforces who are only responsible
for 15% of mistakes where the system designed by management is responsible for 85%.

Deming said, "There is no substitute for knowledge, a small amount of knowledge can save many hours of
hard work.” He believed that you could not measure the most important change factors. The most important
variables are unknown or unknowable. The factors that have the greatest long term impact can be quite
surprising. It could be an earthquake that disrupts service, a drastic change in technology, or sudden
burst of new investment capital. Therefore, have systems in place that are prepared to absorb various
contingencies and adapt to surprises. In short, good systems are more focused on results than procedures,
are innovative and prepared for surprises, and practice Constant And Never Ending Improvement.
Edwards Deming

1. What dangers does Deming warn companys to avoid? What can they do to prepare
for unforeseen events?

2. What is Deming's 2 main contributions to business management practice?

3. Give an example of a system in your 1) department 2) company, and 3) personal

routine that needs improvement. How can they be improved?