Brief Explanation of Deming’s Fourteen Points

1. Create constancy of purpose toward improvement of product and service, with the aim to become
competitive and to stay in business, and to provide jobs.

Deming was of the opinion that one major shortcoming of organizations was constant switching
direction. The reasons for such lack of constancy of purpose could be manifold, including change in
management, focus on short term profits instead of on the customers, inability to understand the time,
effort, and commitment required to bring about long term change, etc. When management displays a
lack of long term commitment in organizational direction, it has a negative impact on the motivation of
the employees. They are uncomfortable with investing their commitment toward any effort if they
cannot be sure that it will be sustained. The result is half hearted effort on the part of employees and
the organizational performance is mediocre at best.

2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to
the challenge, must learn their responsibilities, and take on leadership for change.

By this point Deming wanted to convey that it cannot be business as usual with a minor tweak when
needed. The basic approach has to change with the customer being the focal point of all efforts.
Management must realize that quality is their responsibility and cannot be delegated.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis
by building quality into the product in the first place.

The past approach to quality was that errors were natural to any manufacturing process and could not
be reduced. Organizations felt that their responsibility was to place an inspector at the end of the
manufacturing line to weed out the bad parts from the good and prevent the bad parts from going to
the customer. This approach is unacceptable today as it increases the cost of manufacturing. We incur
costs of making the bad parts, the cost of inspection, and the cost of rework and disposal of bad parts.
This makes products and services uncompetitive. It is the responsibility of the organization to institute
processes, such as Statistical Process Control, to ensure that any errors are caught as soon as they are
made and adjustment to the manufacturing process made to eliminate the errors from being
propagated.

The focus here is on mass inspection. Inspection by itself is not bad, in fact it is required at each stage to
prevent defects from being sent down the line. Mass inspection is unreliable and costly as mentioned
above.

4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move
toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

Traditionally, companies consider suppliers of parts and services as adversaries and try to negotiate with
them purely on price. In turn, the supplier tries to cut corners in order to make a profit and product
quality or delivery performance may suffer. If substandard parts are received in manufacturing, it can
result in line stoppages, which result in loss of production. Similarly if a delivery of a part is delayed, this
will also result in production rescheduling and the company will not be able to produce what was
originally planned. Customer deliveries will suffer.

Moreover the common approach of pitting suppliers against each other to get lower prices has the
effect of the supplier not investing in the long term. Ideally, companies should cultivate suppliers who
become partners and can invest in technology and processes which can benefit the company over the
long run. So companies should seek out suppliers who can serve as long term partners. When a supplier
is in for the long haul, he/she can develop expertise in the product and processes which can be mutually
beneficial.

5. Improve constantly and forever the system of production and service, to improve quality and
productivity, and thus constantly decrease costs.

Deming emphasized that companies need to constantly look for ways to improve the products and
services they provide in order to retain and grow their market share. But he was very clear that just
changing a product or a process arbitrarily does not result in improvement. Companies needed to
understand the nature of variation. Asking workers to do something about common cause variation is
tampering and will not improve the process. Performing fire fighting on special cause variation is also
not improvement. We need to focus on the reduction of variation, where possible, with the aim to
improve the product or service. This requires that management tackle common cause variation by
redesigning the system. Also, providing solutions that eliminate the chances of special cause variation
will improve the system.

6. Institute training on the job.

Deming was clear about the distinction between education and training. Training involves the specific
methods and steps of doing a specific task, i.e., the “What” and “How” of a task, while education deals
more with understanding the “Why.” Education is more broad based and leads to the development of
the person who is receiving the education as well as the person who is educating. Training is more
specific and task related. Therefore the person who is doing the training needs to understand exactly
how the task is to be performed. Only then will the trainer be able to conduct the training effectively.
The purpose of training is to ensure that the task is done with minimal variation. But once the system
has stabilized, i.e., no special cause variation, training will not improve the performance any further.

7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do
a better job. Supervision of management is in need of overhaul, as well as supervision of production
workers.

The image of a supervisor is one of a person who is chasing production quotas, time-keeping, etc. In this
respect, a supervisor performs the task of a policeman. The role of a leader is to help the worker do a
better job. This could involve any number of activities from helping solve problems, to coaching and
counseling. Deming had defined the attributes of a leader as one who understood how the work of the
group fit into the aims of the organization, and who could eliminate obstacles in the way of doing a good
job leading to the worker taking joy in his/her work. The leader understands variation and works to
improve the system that the group works in. Deming recommended that supervisors move from
“supervisory” roles to leadership roles.

8. Drive out fear, so that everyone may work effectively for the company.

A lot of people in companies work in an atmosphere of fear. Fear of making a mistake, fear of mistakes
being found out, etc. This fear results in a stagnant organization where people are content to maintain
status quo. No one wants to stick their neck out for fear of failure if the organization penalizes failure.
But if people do not attempt anything new or different, the organizational performance cannot improve
and the competitive threat is likely to overtake the organization. Also, reporting of mistakes made is also
masked to shield the guilty. The result of this is to prevent the bad news from reaching the
management. This causes problems not to be caught in time and remedial and preventive actions are
not taken. Again, the organizational performance suffers as the same problems keep recurring.

It is the responsibility of top management to encourage planned risk taking, using the PDSA approach, in
an effort to improve processes and products. They should ensure that people are not censured for
mistakes which may be due to a variety of reasons. This will encourage timely reporting of mistakes so
that these may be acted upon in a timely fashion.

9. Break down barriers between departments. People in research, design, sales, and production must
work as a team, to foresee problems of production and in use that may be encountered with the
product or service.

The growth of modern corporations has led to the development of functional departments that have
assumed identities of their own. The people in each department behave as though they have an
independent purpose. The specification of individual KPIs makes it difficult for departments to co-
operate with each other. When this happens the customer is forgotten and the organizational aims are
unfulfilled. It is necessary for management to ensure that the organization thinks as one unit and not as
a conglomeration of independent departments.

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and 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.

– Eliminate work standards (quotas) on the factory floor. Substitute leadership.

– Eliminate management by objective. Eliminate management by numbers, numerical

goals. Substitute leadership.

Deming was against empty exhortation of the workers to work harder, to eliminate defects, etc. Such
exhortations, without a method for accomplishing these goals, only lead to frustration as the solution is
typically with the system. This requires management intervention and the elimination of common
causes which can lead to lower defects and better system throughput. If workers are constantly
receiving such exhortations, they are likely to develop an adversarial relationship to the organization
and this will lead to further degradation of the organizational performance.

Deming also was very much against work standards or quotas that are typically arbitrary and do not
reflect the quality requirements of the product nor the capability of the system. Such standards and
quotas only serve to discourage workers who do not understand how these targets are to be met
without sacrificing quality. Deming recommended that it is management’s responsibility to ensure that
workers understand how to achieve targets with the systems and resources at their disposal.

The same thing holds true foe Management by Objectives (MBO) which does not take into account the
methods and means of achieving the objectives. Management that believes in managing purely by
numbers is out of touch with the ground realities and will alienate the rest of the organization.

11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility
of supervisors must be changed from sheer numbers to quality.

Deming was of the strong opinion that a worker typically came to work to do a good job and took pride
in his/her work. This was only possible when the system allowed the worker to produce a quality
product that met the customer’s requirements. Often, management did not understand that 85% of the
responsibility of the output from the system was with the management, and not with the workers. Such
thinking leads to frustration in the workforce and robs the workers of their joy when the job is well
done. So management needs to remove obstacles that prevent the workers from making quality
products. This would require an understanding of the reasons for poor quality and working toward
eliminating the systemic shortcomings. These are all in the management’s purview.

12. Remove barriers that rob people in management and in engineering of their right to pride of
workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by
objective.

As in Point 11, white collar workers in management and engineering also are constrained by the system
in which they work. The white collar workers also come to work with the intention of doing a good job.
But if the policies of the company are focused on numbers, and not on the customers, this will lead to
the alienation among the engineers and managers as well. The process of annual merit rating is
counterproductive to creating a work environment that fosters cooperation and growth of the
individual. Each person ends up competing with his/her colleagues, and this is detrimental to the overall
goals of the organization. Management by objectives, where the management sets arbitrary objectives
without understanding the system capability, also creates frustration among the people who get rated
based on such arbitrary objectives. This practice must stop.

13. Institute a vigorous program of education and self-improvement.

Deming was an educator at heart. He firmly believed in the need for education in addition to training.
Education provided the basis for an individual to understand the structure of the system and the reasons
for the system behavior and performance. Education is basic to the growth of the individual. It is only
through education that the organizations learn how to grow, both individually and collectively.
Education leads to knowledge and the knowledge is further developed using the PDSA process where
we are constantly testing our understanding of the system and its capabilities. This is the only way for
continual improvement.

14. Put everybody in the company to work to accomplish the transformation. The transformation is
everybody's job.

Unlike in the past where quality was the domain of a few people, companies are beginning to realize
that quality requires that each person contribute to the quality effort. This is as true of the persons in
design and manufacturing as it is of people in purchasing, maintenance, and finance. Each function has a
stake in what the customer experiences and therefore a slip up in any area will result in lack of customer
satisfaction. Therefore it is important that everyone understands their role in creating value for the
customer and work toward that end.