He has always looked younger than he is, but even with that he is clearly old. He moves slowly through the hotel lobby, preceded by his ample stomach, leaning forward slightly and looking straight ahead through his glasses. From a distance, he appears to be completely bald, but as he gets closer, you see that his hair is white and cropped close to his skull. There are hearing aids in both ears. He is, as always, dressed in a custom-made suit. All of his jacket pockets are stuffedclippings, a calculator, scraps of paper, a little magnifier, file cards, a small notebook, a pocket diary and whatever else he's picked up-and the pocket of his white shirt holds no fewer than a half-dozen pens and markers. On the lapel of his jacket there is a round, thick, gray pin about the size of a dime. The only thing about him other than his age that attracts anyone's attention this morning is that his assistant, an intern and doctoral candidate in business management, is an attractive, well-dressed woman young enough to be his daughter's daughter, and they are walking through the lobby holding hands. You get a sense that for him, it's partly for support and partly for the hell of it.
His business card reads "W. Edwards Deming, Ph.D., Consultant in Statistical Studies." It would be more accurate if it added, "and Capitalist Revolutionary." He wants changes, and not little ones, in everything-business, industry, education, how we live, how we teach our children and how we deal with one another. Deming wants something better for us all, and for most of his 89 years he's been fighting to get it. He knows from experience that what Machiavelli wrote is true: "There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things."
He initiated a new order of things in japan. It was a 49-year-old Ed Deming, tall and crew-cut, who in 1950 started teaching japanese managers, engineers and scientists how to manufacture quality. An important step was to teach them to use statistics to find out what any system would do, then design improvements to make that system yield the best results. That idea sounds so logically simple that the tendency is to say, "Everyone knows that." No, everyone doesn't. Americans have a penchant for solutions that are easy to understand, easy to do, aimed at a specific goal and fasten nonthreatening steps to nirvana in 30 days. When it comes to improving what we do, there seems almost to be a flavor-of-the-month approach with each new, highily touted technique stepping on the heels of the one that went before-management by objective, management by results, management by problem report and resolution. Those are the cookbook methods, where you blend the worker and the machine, stir in a pinch of raw material, add a promise of a bonus (or a threat of dismissal), half-bake for 30 minutes and declare a dividend. It's easy to explain, easy to understand, and it doesn't work. Deming teaches that the more quality you build into anything, the less it costs. That, too, sounds self evident, but it's not. Maryann N. Keller, an automotive industry analyst and managing director of a brokerage firm, believes that the most profound change in the American auto industry in the past ten years was the realization that quality can cost less because you design it in rather than inspect it in." The traditional American idea of quality is, as Keller says, to inspect it in; that is, you build a whole lot of widgets, inspect them and separate the good from the bad. The bad can't be sold, but they cost a lot. Not only must all those inspectors be paid, but a bad widget takes the same amount of raw material, machinery, work time and attention as does a good widget. That explains why, typically, about 25 percent of any manufacturing plant's budget goes for repair and rework. That's why so many manufacturers think quality costs more, but what actually costs is a lack of quality. Vernay Laboratories in Yellow Springs, Ohio, makes small, precision-molded rubber parts for the automotive, home appliance, pharmaceutical and medical industries. Before the company heard of Deming in 1983, there was one inspector for each employee molding parts, and to insure quality, those inspectors checked everything that was produced. Think of that: nearly half of the production workers were paid to check what the other half did. In five years, doing what Deming taught it, Vernay cut its ratio of inspectors to molders by 75 percent. In the same five years, the plant's scrap and returned-product rates were cut by three-quarters, and productivity in the plant was up 30 percent. Quality was up, costs were down and the savings could be given to the customers. "One of the great pleasures I've had over the last five years," says Dale Piper, national sales manager, "was walking into the purchasing office of one of our larger customers and telling them that we were going to be giving them a price reduction, a completely unsolicited price reduction."
The basics of Deming's method are contained in a list of objectives he calls "the 14 points." These managerial imperatives are more philosophical than mechanical. The first of them is to "create constancy of purpose." You have to decide what business you're in and how you can stay in that business. It sounds deceptively simple, until you try it. Buggy whip makers undoubtedly believed they were in the business of making buggy whips, which explains why they are no longer in business at all. They, were actually in the business of vehicle acceleration; just making buggy whips, even the world's finest-quality buggy whips, wasn't enough. Part of constancy of purpose is staying ahead of the customer, not only meeting present needs, but planning for future needs, as well.
The Ford Motor Company began consulting with Deming in 1981, and one of the first questions he asked was about constancy of purpose. Top management began to think about it. Eighteen months later Ford had a 350-word statement of its missions, values and guiding principles. By now, there can't be a Ford employee, supplier or dealer anywhere in the world who does not know that Quality is job l." Donald Petersen, Ford's recently retired chairman and chief executive officer, says, "I am a Deming disciple." And he adds, "Those enterprises that don't adopt a quality culture simply are not going to succeed."
The issue is even broader than that. Improving quality, Deming says, automatically increases productivity, one of the measures economists use to judge how
I the economy is doing. Ours is improving, but not at a pace with japan's. At current rates, the United States' productivity will double in 120 years, japan's in a generation, meaning its children's standard of living will double while our children's will stay about the same.
When he first went to japan, Deming was certain he could teach the japanese how to join the leading industrial nations by improving quality. "I think that I was the only man in 1950," he says, "who believed that the japanese could invade the markets of the world and would within five years." The lapel pin that few in this country could recognize represents japan's Second Order Medal of the Sacred Treasure, awarded to him by the late Emperor Hirohito. The citation says the japanese people attribute the rebirth of japanese industry and its worldwide success to Ed Deming.
As famous as Deming is in japan, he was comparatively unknown in the United States until june 1980, when he appeared in a network television documentary titled, If Japan Can, Why Can't We? It compared industrial productivity in japan and the United States. I was the writer and narrator. Cecelia S. Kilian, Deming's secretary since 1954, and known almost universally as Ceil, said that starting the next morning, "Our phones rang off the hook.... Dr. Deming's mail quadrupled, and beyond." Petersen at Ford was one of the eventual callers. By late 1987 he told an interviewer, "We are running well over 50-percent-better levels of quality in our products today, and I dare say that I would not have predicted that much improvement in this short time." That same year, 1987, General Motors called Deming. The word was spreading in the industry: building quality drives costs down and profits up. At an age that most American men will never reach, Deming continues trying to transform (his word) the United States, to make it possible for us to join what he calls "the new economic age." To teach corporate managers how that can be done, he works six days a week and is booked into 1991. Ceil is his whole staff.
Deming is never quite satisfied, so any attempt to chisel what he says into stone is frustrated by his insistence on constantly trying to improve or clarify his thoughts. But that continual improvement is at the heart of his teaching. It is one of his 14 points: Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs." To get to that point, Deming says, you not only need constancy of purpose, you also have to recognize that we're in a new economic age with a single global market, that mass inspection does not produce quality, and that buying from the lowest bidder is costly. To get good supplies, Deming says, you work with a single supplier to improve his quality and lower his costs, cultivating a long-term relationship in which both of you will profit. Cheaper is not always better That last one leaves people in purchasing departments almost in shock, since it is a basic tenet of American industry that you play one supplier against another, demanding and getting lower prices, and if one supplier won't cut his price, another one will. That's the way you cut costs and improve profits, and everyone in business knows that. And like a great many other things that everyone knows, it's wrong. Deming tells the story of a shoe manufacturing company where productivity dropped like a rock in a well, and a consultant was called in. The first thing the consultant did was what the typical American manager would rather die than do: the consultant went on the factory floor and asked the workers what went wrong. Shoes are sewn together, and it takes an enormous quantity of thread. Sewing machine operators said the thread kept breaking, so they spent half their day rethreading the machines. You know the end of this story. Some time earlier, some genius in purchasing found a company that would sell thread a penny a bobbin cheaper than their regular supplier, and to save a penny a bobbin, the company's productivity was cut in half.
The rest of Deming's 14 points basically deal with management and labor and their relationship. He says quality is made in the boardroom, but everyone must have a part in changing the company. Management must learn about the responsibility for quality, must learn how to lead, instead of giving orders, and must make it possible for everyone to work together for the good of the company.
Everyone already knows that-, If, in the typical American firm, everyone is working for the good of the company, then why are different divisions within that company competing? Why is it necessary to give employees annual ratings or performance appraisals? What's more important to you, getting a good rating for yourself, or helping another person improve so that the whole company will prosper? Why are there numerical goals or work standards? Are we trying to make quality, or are we satisfied to make dally quotas?
If you want to make quality, management leads in the design of product and service, but everyone has to understand where they're going. If you tell someone to wash a table, the order doesn't mean anything unless the worker knows why. Is it being washed to serve lunch? Simple enough and quickly done. Is it being washed as an emergency operating table? Not easy, but it can be done. Is it being washed to go into a computer "clean room"? Can't be done.
Job training alone, Deming says, is not enough; the company has to help with employee education in a more general way, too. At Ford there are joint company-union education programs, everything from helping you brush up on your high school math to studying for your college degree. College courses are taught at no cost to employees in learning centers at Ford facilities or at the local union hall. The idea is this simple: the smarter everyone gets, the more everyone will be able to help the company.
W Edwards Deming is an unlikely capitalist revolutionary. Had he become a Marxist, it would be more understandable. If he ever saw a silver spoon as a kid, it belonged to someone else. He was born in Sioux City, Iowa, on October 14, 1900. With his mother and father, he and younger brother Robert went to Wyoming seven years later. Wyoming was the frontier, and his father had staked a land claim there. Sister Elizabeth was born in a four-room tar-paper shack in Powell. In winter, snow blew through cracks in the walls and around the windows. Deming remembers kneeling in the shack with his mother and brother and praying for enough to eat. "I think I had a ob when I was 8 years old or 9," Deming says. "Worked in a hotel, night and morning, before and after school, a job that wouldn't exist today." He carried in kindling and coal, emptied washbasins, tended the boiler. "A dollar and a quarter a week, but those were gold dollars."
In the fall of 1917, his saved money in his pocket, Deming took a train to the University of Wyoming at Laramie. "I studied engineering," he says, "but I really didn't know what engineers did. The course appealed to me-mathematics, thermodynamics, electrical circuits." To stay in college, he worked at anything that paid; after four years, he left Laramie with about the same amount of money he'd arrived with.
Deming taught and finished work on his PhD in mathematical physics at Yale in 1927, then went to work for a research laboratory affiliated with the Department of Agriculture in Washington, D.C. He had other offers, good ones in private industry, he recalls, but he decided on this one and, he says now, "That was no mistake.... There were great men there." (And at least one great woman, Lola E. Shupe, his assistant and coauthor of several papers, whom he married in 1932. She died in 1986.)
Deming had learned to use statistical theory while studying physics. At the Fixed Nitrogen Lab, he devised statistical methods to replace some experiments, saving time and money. Impressed, one of his bosses introduced him to Walter Shewhart, then at the firm now known as AT&T Bell Laboratories, who was working to improve the quality of telephone equipment. Shewhart wanted the expression "as alike as two peas in a pod" to be replaced by "as alike as two telephones." He believed that could be accomplished with statistical analysis.
During World War 11, it was largely through Deming's efforts that 35,000 American engineers and technicians were taught to use statistics to improve the quality of war materiel. That work brought him to the attention of the Union of japanese Scientists and Engineers (JUSE). When the war was over, japan was little more than a pile of rubble and its industrial capacity was severely crippled. JUSE asked Deming to help its members increase productivity. In july 1950 he met with the top management of japan's leading companies, and he gave eight daylong lectures titled Elementary Principles of the Statistical Control of Quality" to 230 japanese managers. It was, essentially, the same course he had taught Americans during the war.
Why did his teachings catch on in japan but not here? Because, Deming says, the japanese knew they were in an economic and industrial crisis and we don't. Yet here we are in 1990, the world's most indebted nation, borrowing heavily from, of all people, the newly wealthy japanese. Deming tells students at a four-day seminar in Texas that we can recover. Then he adds, "Nobody's sitting here predicting that we'll survive. We may not. There's no regulation saying we must survive. Purely voluntary." And he tells a group in Ohio, "We can rise from the ashes like a phoenix, but it will take a transformation to do it."
By transformation, he means adoption of his quality philosophy. It is not so much a recipe of dos and don'ts, although there are some, as it is a method of continual improvement that involves reducing variation. American manufacturers say that they are already doing that, that they have strict specifications for every part. A quick story. An American car company was having trouble with transmissions made at one of its plants here, and warranty costs were enormous, a drain on profits. The same transmission, built to the same specifications at a plant in japan, was not causing problems. Engineers carefully examined 12 American transmissions; variations existed, but all were well within specifications. A quality-control inspector would have been delighted with every one. When the 12 japanese transmissions were tested, an engineer reported that the measuring equipment had broken. It hadn't; in those transmissions, there simply was too little variation to measure. They didn't just satisfy the specs; for any practical purpose, they were identical. Staying close to what is best That story's true; this one's made up. Assume that we all work in a room together, and we know by statistical analysis that we produce our best work when the temperature is 68 degrees E But if it's 67 or 69, the loss in terms of the quality of our work is so imperceptible that it simply doesn't matter. Now, should the temperature fall to 58 or rise to 78, the loss will be enormous. Take that same idea and apply it to specifications. Everything inside a given set of specifications is not the same. Some are worse than others, and the farther away you get from what is best, the worse it is and the greater the loss in quality will be.
Statistics alone cannot assure reduced variation, Deming says; it takes everyone, management and labor, working together. To get that kind of cooperation you have to throw out much of what is currently accepted as good management practice. Not only do you have to do away with bonuses and incentive pay because they create competition; once you adopt the Deming method little else stays the same. Ben Carlson, executive vice president at Vernay and chairman of its Deming Steering Committee, says the Deming method "changes the relationship with your customers; it changes the relationship with your suppliers; it changes the relationship you have with your employees." Customers become the most important people in your business. Unless the customer is so delighted that he's not only willing to come back but eager to bring his friends, you can close the door now and save time. Suppliers can no longer be played off one another for lower prices. They become your partners, and you have to help them improve so they can give you continually improving supplies for lower prices. And if you and your employees don't work together in mutual respect toward the same goal, how good the supplies are won't matter. Corny as it sounds, Deming wishes work could be nicer, more satisfying.
In teaching people to be nicer, he himself can be abrasive. Polite to the point of courtliness in social situations, he can be short-tempered and intolerant at work. He always tells people at his seminars that the object is "to have fun," but when one person he is raking over the coals complains, "Dr. Deming, I'm not having fun," he leans back in his chair, smiles broadly and says, "I am."
Deming works as a consultant to private companies, but more people probably know him through his public seminars, most of which are run by Nancy Mann, who has a PhD in biostatistics. People are standing in line to get in. Deming mentions one seminar-500 vacancies, 3,000 applicants. There are 14 of these seminars a year in this country and England with 500 to 600 students each, and a waiting list of about 100 for each seminar. "Students" is perhaps misleading. At a seminar I attended in Dallas, the people were mostly in their 30s and 40s-managers, engineers and technicians from major corporations in all types of business, defense contractors, officers of the Armed Forces, health-care insurers. Deming lectures morning and afternoon for the four days, sometimes from notes, sometimes from memory, but with a good teacher's sense of when the lecture is becoming too intense, as it did at one seminar when he tried to make the class understand that there is no true value of anything, that whatever number you get depends on how you count, and if you change the way you count, the number will change. People think the speed of light is a true value, Deming says, but it isn't; there were ten different published figures for the speed of light between 1874 and 1932. Then in his best professorial voice, which is deep and impressive, Deming quotes Galileo as saying, is not infinity, then it's awfully damned fast." The class roars. The point is unforgettably made. Deming wants American business and industry to prosper. "All I have to offer is to improve profit," he says, but his method is not easy to understand. The standard American corporate questions about quality improvement are, "What do we do? (But keep it simple)" and "How long will it take? (But keep it short)." With Deming what you do is continually improve, not in great leaps forward, but a little here, a little there, and it never gets any easier. You change the way you think, unlearn everything about management you've been taught, and develop an understanding of statistics and psychology, an understanding of how people learn and what makes them change, and an understanding of people's need to take pride and joy in their work. How many steps are there-, No one knows. How long will it take? The rest of your life, but-here's the good news-you should start to see results in three to five years. Why should you do that@ Because the people who have tried it say that it works. And not much does these days. At the hotel, it's early evening, and his lecture is over. Deming is going to his room to rest before dinner, a rare concession to his age. He comes down the hallway, the same attractive, well-dressed young woman holding one hand, and a tall, striking woman, a seminar coordinator, holding his other hand, and they are skipping. Skipping! Three kids home from school. W Edwards Deming, PhD, Consultant in Statistical Studies and Capitalist Revolutionary, wears a smile of the most childlike pleasure and delight.