Edward Deming suggested 14 practices that can significantly improve the quality

Question

Edward Deming suggested 14 practices that can significantly improve the quality and overall performance of both private and public organizations. Here, assess how FedEx is doing on each and identify specific means that could help incorporate his ideas into the culture of your organization. Finally, feel free to disagree with Deming’s assertions but make sure to support your view with specific examples and logical evidence. The 14 points of the Deming Way are:

Number one, create consistency and continuity of purpose, plan products with an eye to the long-range needs of the company, don’t succumb to the pressures of the quarterly report, do you do things for the long haul, or do you succumb to the quarterly report?

Two, set high standards, no company can compete in the world market until its management discards old notions about what’s acceptable as levels of mistakes, defects or inadequate training and supervision, so set high standards. If your organization is to be world class, it has to have world-class standards.

Three, eliminate dependence on mass inspection for quality, instead use statistical controls for incoming and outgoing goods and services.

Four, reduce the number of suppliers, buy based on statistical evidence of quality, not price.

There's an old saying, "Garbage in, garbage out." This can be helped by reducing the number of suppliers.

Five, recognize that there are two general sources of quality problems. One is faulty systems. Indeed, 85% of quality problems could be traced back to faulty systems. And the other is the employee. 15% of quality problems could be traced back to the employee, so strive to constantly improve the system.

Six, improve job training and make continuous learning a way of life.

Seven, provide a higher level of supervision. Focus supervisors’ efforts on helping people to do a better job and providing tools and techniques for people to have pride in their work. The question is: Is that the focus of your supervisors’ efforts at your workplace?

Eight, break down barriers between departments, encourage problem-solving through team work.

Nine, stamp out fear by encouraging open two-way communication so that people at the top know what people at the front want, need and hope for. So that people at the front know what the people at the top want, need and hope for, encourage open two-way communication.

Ten, abolish numerical goals and slogans.

Eleven, use statistical methods for continuous improvement of quality and productivity.

Twelve, remove barriers to pride of work.

Thirteen, institute a vigorous program of education and training to keep people abreast of new developments in methods, materials and technologies. Make your organization a learning organization.

Fourteen, clearly define management’s permanent commitment to quality and productivity of products and services.

Explanation / Answer

We will look at the 14 practices of Edward Deming and try to understand how a company like FedEx is working hard to improve its quality and also we will be identifying specific means that could help incorporate his ideas into the culture of our organization.

1. Firstly the company should be focused on long term perspectives in order to create a sense of consistency and sustainability rather than focusing on achieving short term goals. A firm like FedEx has been able to survive and command a large share of the market by having an outlook which is suited for long terms perspectives. Companies tend to wind up with less than desired results, mostly because most of their efforts are directed towards achieving short term benefits. Our firm is one of the largest manufacturers of engines in the world and has been able to adopt the 14 principles of Deming quite successfully.

We have adopted a principle called goal tree where the company’s goal for an entire year are written down and based on these goal tress, each and every employees’ goals are defined. So in turn, all of us, as employees are working towards achieving a bigger goal that is the goal of the company, thereby also fulfilling our individual goals and job objectives.

2. FedEx has set standards in the logistics business by its business practices and benchmarks. Although benchmarking is important to understand our own position vis-à-vis competition, but just following what is acceptable will ultimately make us also-rans rather than winners in the long run. FedEx has been able to achieve this by following various innovative and ground breaking solutions in business which has successfully made it one of the biggest firms in the world in terms of market share.

Similarly our organization has set unprecedented standards as far as manufacturing is concerned. With its own set of Operating Principles and quality benchmarks, Cummins has been able to deliver superior results to its customers. In-house process verifications, cross-functional quality audits, superior innovations in terms of product design and process optimization have set the firm on a different level compared to its competition.

3. Thirdly, one of the most primary objectives of any organization striving towards zero defect should be following Statistical Process Control. FedEx again has been able to set new ground rules by following SPC on a religious basis. So they do not need to inspect every item that leaves or enters its warehouse but can suitably control a process through SPC.

Even our organization is slowly moving towards SPC through various statistical tools like Run charts, p charts etc. Through inspection and running process control tools, we have been able to measure the process capability of our major operations. Those processes whose Cpk value lie beyond acceptable limits have been corrected upon and most of the other operations where process control tools have not been applied are being monitored closely so as to enable a process capability index which falls within the acceptable limits.

4. Fourthly, a company can achieve better results if it can reduce or consolidate the suppliers into a stronger and more performance oriented partnership model. To ensure FedEx get the best deals from their vendors, the corporate IT department created a purchasing and sourcing group within its vendor management office. The group is responsible for staying on top of the company’s top 100 contracts and the competitive landscape associated with each of those vendors. They have been able to reduce the number of suppliers to considerable extent and have been able to closely monitor the quality and performance of the suppliers. As a result, much superior results have been achieved in terms of defect-free service as well as an improved customer satisfaction.

Our company which deals primarily in engines and generators will find it a little harder to reduce the number of suppliers, but efforts are in process to improve the supplier quality through Statistical Process Control tools. We have been able to achieve almost zero defect product from suppliers in most of the plants across the globe. Along with this efforts are on to rigorously follow a Six Sigma process as far as supplier quality is concerned. Supplier benchmarking and supplier scorecards are used effectively to evaluate the quality of products being received from the suppliers.

5. Continuous improvement projects are ongoing in most of the major manufacturing plants in the world. Firms like FedEx have also embraced improvement project to understand and improve both the system as well as employee quality and understanding. FedEx have developed a quality principle called Quality Driven Management (QDM) to improve its processes as well as its systems. They have recently launched an internal scheme to drive the full potential of their QDM tools and principles like regular training and skill reinforcement programs to ensure effective use of quality tools across their business functions, use of SPC to allow accurate analysis and use of data and active pursuit of systems and practices enabling team members to fully understand customer needs and enable them to develop effective quality solutions.

Even our firm has understood this principle and have aggressively started using Q-Pro (Quality Proactive) and Kaizen to constantly and proactively improve quality. So it is not only the responsibility of the quality leaders but also every stakeholders to contribute positively towards improving the quality of the process and products produced by our company.

6. Most of the organizations including FedEx and Cummins have understood the importance of continuous learning and improved job training. So definite efforts are being made to make the employees more knowledgeable as well as engage them effectively so that the overall process can be improved effectively.

7. In FedEx it is the responsibility of every supervisor to improve or enhance the quality of work done by the subordinate. So every manager or supervisor directly contributes towards the development and training of every subordinate. Similarly most of the firms are looking to involve the managers into contributing more effectively towards learning and development of the entire team under him, so that it can have a better impact on the overall performance of the firm.

8. Most of the firms including FedEx are looking at a boundary-less working environment so that each department of functionality can actively contribute towards the betterment of the entire organization. Goals are aligned in such a way that there is a much more focused need for cooperation among the various departments which can inevitably lead to a better and smarter and more empowered work force. Our firm has recently started an initiative called boundary-less learning where every team nominates members who can share their experiences and learning with the other departments as and when needed.

9. Two way communication is again encouraged in most of the major firms and FedEx now strictly follows a two-way channel of communication where the people at the higher level can easily approach the people who are close to the ground reality and vice-versa. This basically helps in understanding and breaking down of a complex problem into simpler sub-steps so that each member can have an active part in its resolution. We also follow a similar culture, where we encourage the operators and associates to approach the senior management in case of any requirement. Similarly the Leadership team of every plant interacts with all the plant operators to understand their concerns and alleviate any fear or disputes that may arise otherwise.

10. Most firms like FedEx and Cummins are trying to move towards a numberless goals – so that achievements and performances are measured not in figures or slogans but more subjectively with inputs from every stakeholder concerned. This will ensure a fair working culture and a free thinking environment where people won’t be bogged down by numbers, but can utilize their intellect into resolving issues on a far more subjective level.

11. FedEx and Cummins have moved towards following statistical methods for continuous improvement of productivity and quality. All the data are analyzed using statistical tools to understand process capability and improvement opportunities. As-Is Process maps are defined, analysis is carried out based on supporting data, gaps are analyzed and subsequently a To-Be process map is defined to plug the loopholes and optimize the processes and improve the overall productivity of the plant.

12. Every individual should be proud of what his or her work – that is one of the key mantras of every firm today. Even FedEx follows this religiously by ensuring every individual is proud of what he / she is doing. No work is small or insignificant, everyone can contribute towards making the company a great place to work at. This is the tagline that we follow at our firm. So slowly but surely, firms are adapting this methodology in its working culture.

13. Every company should invest in the education and training of their workforce, encourage self-education and introduce training programs, worship knowledge and professionalism. The better and quicker the quality team is adept to understanding the processes, identifying the loopholes, analyzing the ongoing process through statistical tools and implementing the proposed solution, the better will be the productivity, efficiency and quality of the product being produced or service being performed. This also helps us to achieve cost leadership in our respective segments. So it is very important to make our organization a learning and continuously self-improving organization.

14. In FedEx, the leadership model has clearly replaced the bureaucratic model of the manager deciding on how and everyone else must perform. In our firm also, it requires the Central Leadership Team (CLT) with a plan of action to carry out the quality mission. Everyone in the organization should be equally involved in improving the overall quality and productivity of the firm. Operators or workers alone cannot achieve this objective nor can managers or supervisors alone can improve the overall functioning. It requires cooperation and coordination among everyone with a permanent commitment to quality and productivity of products and services to achieve a market leadership position. FedEx has been able to achieve it through following the Deming’s 14 principles thoroughly and as time goes by, more and more companies are looking to adopt the same.

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