The Opinion Page
News and comments about the issues facing today's SCM and Inventory Management professionals.
For the past numbers of weeks, we have been on a journey of discovery of the thoughts, observations, and solutions about challenges in the fields of Quality Management and Supply Chain Management, as articulated by Dr. W. Edwards Deming. Practical applications of his theories have been discussed, and the enduring nature of his works have been revealed. Dr. Deming was truly one of the rare and brilliant visionaries of the 20th Century. Again, I credit Mary Walton and her book titled "The Deming Management Method" as an excellent synopsis of Dr. Deming's theories.
Dr. Deming's work goes far beyond the prescription for success as he had put forward in his famous Fourteen Points. The Points should be viewed as summaries of his views. They are a roadmap for Corporate Executives in Western industries that were formulated on successful outcomes of his exhaustive work in Asia, most notably post-WWII Japan. Like so many Eastern traditions, the Points must be incorporated into the culture of the firm - embraced as a way of life rather than a turnkey solution. It is a long path for any company to follow, but the potential rewards are tremendous.
Beyond the Fourteen Points, Dr. Deming authored his Seven Deadly Diseases and further Obstacles that are presented below:
The Seven Deadly Diseases:
1. Lack of Constancy of Purpose
Companies must think beyond the next quarterly report and dedicate themsleves to the new philosophy in the long term.
2. Emphasis on Short Term Profits
Dr. Deming warned of the dominance of lawyers and financial wizards in companies' Board Rooms, who may be ready to sacrifice core competencies and values in order to increase shareholders' dividends. The catastrophe of Enron is a brilliant illustration of this disease.
3. Evaluation of Performance, Merit Rating, or Annual Review
Dr. Deming redefines MBO (Management by Objective) as "Management by Fear". He argues that these mechanisms reward short term performance at the expense of long term planning and pride of workmanship.
4. Mobility of Top Management
By shifting senior managers around the business at high rates of speed ("fast-tracking") companies and individuals inhibit implementation of long term change.
5. Running a Company on Visible Figures Alone
By focusing exclusively on the numbers, companies are in danger of neglecting intangibles that may be associated with customer satisfaction and continuous improvement.
6. Excessive Medical Costs
This was a special disease, which for some companies is its largest single expenditure.
7. Excessive costs of warranty, fueled by lawyers
The USA is one of the most litigious countries in the world.
Among some other Obstacles that he discussed were:
- "Nelgect of long term planning"
- "The supposition that automation, gadgets, and new machinery will transform industry"
- "Our problems are different"
- "Quality by inspection"
- "Meeting specifications"
- "The unmanned computer"
- "Inadequate testing of prototypes"
- "Anyone who comes to help us must understand all about our business"
I encourage the reader to speculate on exactly what Dr. Deming meant by each of these obstacles, while relating them to examples within our own career. Then, research the Obstacles in Deming's own words. They will appear to be surprizingly self-evident and consistent with your instincts.
There is no doubt that introducing cultural and structural change in the magnitude advocate by Dr. Deming must be chamioned by Senior Management - indeed, through the Board of Directors - anddriven down through all levels in the organization. Unofrtunately, winning converts in middle management and professional ranks, such as QC Managers and Inventory Controllers, will do little good, as these people do not have the power to implement uch change. Nevertheless, middle management can take lessons from Dr. Deming at more "micro" levels. The 14 Points can help to guide us with repect to implementing a spirit of continuous improvement in our departments, and to help us with issues of employee relations and understanding morale issues.
Studying Dr. Deming's work had a profound impact on my own approach to employee management and developing business processes. His lessons have allowed me to realize numerous successes which endured for many years. I encourage my readers to study more about this great visionary, and use his spirit and content to maximum capability.
John Skelton is the Principal Consultant and founder of Strategic Inventory Management.