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Summary:

While traveling from Mumbai to New Delhi last week, I met an executive from one of India’s big conglomerates, Mahindra & Mahindra. In case you’ve not heard of it, Mahindra is structured much like the well-known Tata Group. Mahindra has operations in auto-manufacturing (it is the […]

While traveling from Mumbai to New Delhi last week, I met an executive from one of India’s big conglomerates, Mahindra & Mahindra. In case you’ve not heard of it, Mahindra is structured much like the well-known Tata Group. Mahindra has operations in auto-manufacturing (it is the 2nd largest tractor-maker behind John Deere, and makes more jeeps than Jeep!), consumer finance, insurance, and IT-outsourcing. For its creative management practices, Mahindra won something called The Deming Prize in 2003 — and all its managers very proudly bear the “Deming seal” on their business cards. I was embarrassed to say that I didn’t know what this was.

The late W.E. Deming was a consultant and expert in quality control known for revolutionizing Japan’s manufacturing systems in the 1950’s. He ultimately established a think tank in Washington, DC to promote his social-capital philosophy — long before this idea was popular. Deming believed blending “commerce, prosperity and peace” could make businesses more successful.

Sounds lofty but it turns out that F|R contributor and founder Amy Lang studied Deming at Fordham Business School. (See 3 Bites of Wisdom from Barksdale.) Earlier this year Amy actually sent me a memo with the 14 Points that constitute The Deming System of Profound Knowledge, thinking they’d make a good Found|READ post. You might not be in manufacturing, but these points can still help you — Mahindra, anyway has migrated Deming’s ideas across its numerous operating units, from its jeeps to consulting, and it has made a difference to them.

So here are W.E. Deming’s 14 Points for “Profound Knowledge”

1. Create constancy of purpose
toward improvement of a product and service with a plan to become competitive and stay in business. Decide to whom top management is responsible.

2. Adopt the new philosophy. We are in a new economic age. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship.

3. Cease dependence on mass inspection. Require, instead, statistical evidence that quality is built in. (prevent defects instead of detect defects.)

4. End of the practice of awarding business on the basis of price tag.
Instead, depend on meaningful measures of quality along with price. Eliminate suppliers that cannot qualify with statistical evidence of quality.

5. Find Problems.
It is a management’s job to work continually on the system (design, incoming materials, composition of material, maintenance, improvement of machine, training, supervision, retraining)

6. Institute modern methods of training on the job.


7. The responsibility of the foreman
must be to change from sheer numbers to quality [which] will automatically improve productivity. Management must prepare to take immediate action on reports from the foremen concerning barriers such as inherent defects, machines not maintained, poor tools, and fuzzy operational definitions.

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

9. Break down barriers between departments.
People in research, design, sales and production must work as a team to foresee problems of production that may be encountered with various materials and specifications.

10. Eliminate numerical goals, posters, slogans for the workforce, asking for new levels of productivity without providing methods.

11. Eliminate work standards that prescribe numerical quotas.

12. Remove barriers that stand between the hourly worker and his right of pride of workmanship.

13. Institute a vigorous program of education and retraining.

14. Create a structure in top management that will push every day on the above 13 pts.

  1. Carleen, What you discovered is probably one of America’s biggest ironies. Two of the greatest minds who have helped shaped Quality in a global industries are revered with almost god-like stature. Yet they are practically unknown in their own home soil. Peter Demming and Watts Humphrey. Demming’s story actually begins from Japan in the 50s. Those were the days of shoddy quality of Japanese goods. The principles as you point above, show you the value that it created in the manufacturing industry in Japan. The other icon who did the same for the software industry is Watts Humphrey. Humphrey was the proponent of the software CMM model, which helped the Indian software industry establish the quality goals it could deliver to. It may not be a hyperbole, but for both the manufacturing and the software industry to get global acceptance, Demming and Humphrey respectively paved the way. It is also a sad reflection about how these industries have really worked in America. Not that matters anyway as whither are the factories in the US.

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  2. Yep. A Handa, you are right, he is known everywhere around the world as one of the god fathers of quality but for some reason in USA he is not famous. I study business in Uruguay and through out my entire university life, Demming has never stopped popping up.
    “Los 14 Puntos de Demming” are wonderful and can be easly applied to start ups. Words of wisdom.

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  3. Guys great to hear from you both on this thought-leader. Maybe his ideas will become more urgent in the U.S. over time. Only, it’s not Paul Demming, or Paul Deming. (That guy is a musician). The person we’re talking about is W. E. Deming.

    http://www.deming.org/
    http://en.wikipedia.org/wiki/W._Edwards_Deming

    Just fyi….

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  4. For those interested in more on Deming’s ideas, I have put together some thoughts on Deming’s Management philosophy. Also my Curious Cat Management Improvement blog Deming category includes many posts on the topic.

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  5. Our business embraces Demings ideas and philosophy. The 14 points are so powerful that any business interested in survival should start to implement them urgently.

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  6. Carleen,
    While you are at it please get a copy of “Out of the Crisis” by W. Edwards Deming and get the information directly from his words. I worked with the late Dr. Deming at one of his seminars in Anaheim, CA and the power of the man’s conviction, the soundness of his logic was evident. I think he was always sad that his philosophy was not quickly accepted by American businesses. Please also try to find the NBC white paper – “If Japan Can, Why Can’t We”.

    John,
    I will be checking out your blog shortly. I will also be building my own site to share all I know about Deming’s methods and how they apply to the business world.

    All the best.

    Gary

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