Edward Deming’s Radical Theory
This is Part 1 of a 3 part series. In this series, we tell the story of two men: Edward Deming and Dr. Brent James. Their understanding of systems improvement, and focusing on quality from the outset, has radically shifted the level of care being delivered in hospitals and medical centres all over the world. In one hospital chain, Intermountain Healthcare, mortality rates were reduced by 2,000 per year, while costs were slashed by hundreds of millions of dollars. All through focusing on quality first and foremost. But before we get to that, let’s start at the beginning.
In the 1920s you could go into a store anywhere in the world and the shopkeeper was likely to reach under the counter and pull out an American product. US goods were known the world around as high quality and 50% of all goods mass produced came from US manufacturers.
After World War II, this began to change. US manufacturers had gotten lazy. They didn’t believe it was important to pay much attention to what customers wanted to buy. Nor did they think quality was something consumers would be willing to pay for. They also thought the notion that Japan — a country known for shoddy merchandise — could ever present the US with serious competition was ludicrous.
This was the reaction Edward Deming received when he first started telling US executives that by improving quality they could both sell more and reduce costs.
Meet Edward Deming
Edward Deming, who was born in 1900, obtained a bachelor’s degree in electrical engineering and a PhD in statistics from Yale.
When he first saw the problem with the direction US manufacturing was going, he approached executives to warn them. His message was simple, yet profound – he told executives that by improving quality, they could reduce their expenses, increase productivity, and ultimately, control more of the market.
Deming felt that rather than inspecting products for defects after they were made, the manufacturing process should be redesigned to make sure high-quality products were built right from the start. His message fell on deaf ears.
Japan is ready for Deming’s message
After World War II, Japan’s economy was struggling. So much so, that General Douglas MacArthur, frustrated at his inability to complete a phone call in Japan without the line going dead, requested that Deming be brought to Japan.
Because of his expertise in quality control techniques, once in Japan, Deming was invited to speak in front of the Japanese Union of Scientists and Engineers. As it turned out, the war had left the Japanese more than willing to listen to what Deming had to say.
In particular, Japanese businessmen were already aware that the goods they were manufacturing were shoddy in comparison to what their overseas competitors were producing. Likewise, they couldn’t afford to waste raw materials producing things that didn’t meet post-production inspection standards.
So, in 1950, Deming began training hundreds of Japanese engineers, managers and scholars. He even had the distinction of training top industrialist, Akio Morita, Sony’s Co-Founder, and Kiichiro Toyoda, Toyota Founder.
Deming taught the Japanese manufacturers that focusing on improving the quality of their goods from the very beginning would actually reduce costs because it would cut back on recalling products and rectifying damages later down the track.
He explained that this focus on quality would also improve market share because customer loyalty and word of mouth would improve.
In essence, Deming’s approach involved documenting every possible process in a company, pinpointing those processes that had the biggest impact on a business’ bottom line, and improving those processes first.
As Japanese manufacturers began implementing Deming’s techniques, their productivity skyrocketed, as did the quality of their goods. These factors – coupled with the lower cost of Japanese products – created new international demand for Japanese goods.
Sony and Toyota were among the first two companies to become world-class producers after adopting Demings’ teachings.
Ford gets it… finally
After some time, American executives began to notice that some Japanese products were superior to their American counterparts. For instance, Ford Motor Company began manufacturing a car in the 50s with two models – one with an American transmission and one with a Japanese transmission.
When Ford customers began requesting the car with the Japanese transmission and were even willing to wait for it, Ford engineers wanted to understand why, since the transmissions were made to the same specifications.
So, they took both transmissions apart and discovered that the parts used in the Japanese transmission showed much less variation. In the Japanese motors each part was within 1/16th of the specifications, while the US parts were within 1/8th. This made the cars with Japanese transmissions run much smoother, with less problems.
Despite this realisation, it still took Ford several decades, before it was willing to get on board with Deming’s quality movement.
That moment came in the early 1980s. Ford was hemorrhaging money, incurring $3 billion in losses between 1979 and 1982. Ironically, in 1980, the company had undergone the largest recall in American history for defective transmissions. In an effort to turn things around, Larry Moore, Ford’s newly appointed Corporate Quality Director, recruited Deming to start a quality movement at Ford.
When Deming came on board, he told Moore that management’s actions were responsible for 85% of all of Ford’s problems in developing better cars. That’s because after arriving at Ford, Deming felt that the company had the most incompetent upper management he’d ever encountered, with executives acting like warring gang lords, viewing any change as a threat to their organisational power.
Even so, Deming’s consulting work did manage to turn things around. In 1986, Ford introduced the profitable Taurus-Sable line.
Ford chairman, Donald Petersen, wrote at the time, ‘We are moving toward a quality culture at Ford and the many changes that have been taking place here have their roots directly in Deming’s teachings.’
That same year, Ford became the most profitable American automobile company. For the first time in over 40 years, Ford was earning more than General Motors. In the following years, the company’s earnings continued to surpass General Motors and Chryslers.
The big lesson from all of these companies is simple yet deeply profound: focus solely on quality and everything else will improve. This is a lesson that has even stood true in healthcare.
When Deming’s methods were used by Dr. Brent James at Intermountain Healthcare, the hospital chain’s mortality rates dropped by thousands per year, while operation costs were reduced by hundreds of millions of dollars in just a few short years.
Dr. James is heralded as one of the most iconic men in the history of qualitative systems improvement. Even the New York Times can’t write a feature article on him that’s less than 8,000 words.
Read the full story of how Dr. James leveraged Deming’s principles at Intermountain Healthcare’s hospitals in Part 2: Dr. Brent James – The Man Who Saved 2,000 Lives a Year, While Reducing Hospital Costs By Hundreds of Millions of Dollars.
Edward Deming's Radical Theory ni sehemu ya kwanza ya safu ya vitabu. Katika mfululizo huu, tunasimulia hadithi ya wanaume wawili: Edward Deming na Daktari Brent James. Uelewa wao wa kuboresha mifumo, na kuzingatia ubora tangu mwanzo, umebadilisha kabisa kiwango cha huduma inayotolewa katika hospitali na vituo vya matibabu ulimwenguni kote. Katika kampuni moja ya hospitali ya Intermountain Healthcare, viwango vya vifo vilipunguzwa kwa 2,000 kwa mwaka, wakati gharama zilipunguzwa kwa mamia ya mamilioni ya dola. Yote kwa kuzingatia ubora kwanza na kwanza. Lakini kabla hatujafika hapo, hebu tuanze kutoka mwanzo. Katika miaka ya 1920, unaweza kuingia kwenye duka popote duniani na mmiliki wa duka alikuwa na uwezekano wa kufikia chini ya counter na kuvuta nje bidhaa ya Marekani. Bidhaa za Marekani zilijulikana ulimwenguni kote kama bidhaa za ubora wa juu na 50% ya bidhaa zote zilizozalishwa kwa wingi zilitoka kwa wazalishaji wa Marekani. Baada ya Vita ya Ulimwengu ya Pili, hali hiyo ilianza kubadilika. Wauzaji wa Marekani walikuwa wameanza kuwa wavivu. Hawakuamini ilikuwa muhimu kulipa umakini sana kwa kile wateja walitaka kununua. Wala hawakufikiri ubora ulikuwa kitu ambacho watumiaji wangekuwa tayari kulipa. Pia walidhani wazo kwamba Japani - nchi inayojulikana kwa bidhaa za hali ya chini - ingeweza kamwe kuwasilisha Marekani na ushindani mkubwa ulikuwa wa kipumbavu. "Hii ilikuwa ni majibu Edward Deming alipopata wakati yeye kwanza kuanza kuwaambia watendaji wa Marekani kwamba kwa kuboresha ubora wao wote wawili wanaweza kuuza zaidi na kupunguza gharama. """ Edward Deming alizaliwa mwaka 1900 na alipata shahada ya kwanza katika uhandisi wa umeme na PhD katika takwimu kutoka Yale. Alipoona tatizo la mwelekeo wa uzalishaji wa Marekani, aliwaendea wakurugenzi ili kuwaonya. Ujumbe wake ulikuwa rahisi, lakini wenye kina - aliwaambia watendaji kwamba kwa kuboresha ubora, wangeweza kupunguza gharama zao, kuongeza uzalishaji, na hatimaye, kudhibiti zaidi soko. Deming aliona kwamba badala ya kukagua bidhaa kwa ajili ya kasoro baada ya kutengenezwa, mchakato wa utengenezaji unapaswa kubuniwa upya ili kuhakikisha bidhaa za ubora wa juu zilitengenezwa tangu mwanzo. Ujumbe wake haukupata kusikilizwa. Japan iko tayari kwa ujumbe wa Deming Baada ya Vita vya Pili vya Ulimwengu, uchumi wa Japani ulikuwa ukijitahidi. "Jenerali Douglas MacArthur, ambaye alikuwa amevunjika moyo na kutoweza kufanya mazungumzo ya simu nchini Japan bila kukosa mawasiliano, aliomba kwamba Deming apelekwe Japan.""" Kwa sababu ya ustadi wake katika mbinu za kudhibiti ubora, mara moja huko Japani, Deming alialikwa kuzungumza mbele ya Chama cha Wanasayansi na Wahandisi wa Japani. Kama ilivyotokea, vita vilikuwa vimewaacha Wajapani wakiwa tayari zaidi kusikiliza kile Deming alikuwa na kusema. Wafanyabiashara wa Japani walikuwa tayari wanajua kwamba bidhaa walizotengeneza zilikuwa za hali ya chini ikilinganishwa na zile zilizotengenezwa na washindani wao wa ng'ambo. Vivyo hivyo, hawakuweza kumudu kupoteza malighafi zinazozalisha vitu ambavyo havikukidhi viwango vya ukaguzi wa baada ya uzalishaji. Katika mwaka wa 1950, Deming alianza kufundisha mamia ya wahandisi, wasimamizi na wasomi wa Japani. Hata alikuwa na tofauti ya mafunzo ya viwanda juu, Akio Morita, Sony's Co-Mwanzilishi, na Kiichiro Toyoda, Mwanzilishi wa Toyota. Deming aliwafundisha wazalishaji wa Kijapani kwamba kuzingatia kuboresha ubora wa bidhaa zao tangu mwanzo kwa kweli kupunguza gharama kwa sababu ingekuwa kupunguza nyuma bidhaa na kurekebisha uharibifu baadaye chini ya track. Alisema kuwa lengo hili la ubora pia litaboresha sehemu ya soko kwa sababu uaminifu wa wateja na neno la kinywa kitaongezeka. Kwa msingi, mbinu ya Deming ilihusisha kurekodi kila mchakato unaowezekana katika kampuni, kugundua michakato hiyo ambayo ilikuwa na athari kubwa zaidi kwa mstari wa chini wa biashara, na kuboresha michakato hiyo kwanza. Kadiri watengenezaji wa Japani walivyoanza kutumia mbinu za Deming, uzalishaji wao uliongezeka sana, na vilevile ubora wa bidhaa zao. Sababu hizi - pamoja na gharama ya chini ya bidhaa za Kijapani - ziliunda mahitaji mapya ya kimataifa ya bidhaa za Kijapani. Sony na Toyota walikuwa miongoni mwa makampuni mawili ya kwanza kuwa wazalishaji wa darasa la dunia baada ya kupitisha mafundisho ya Demings. Baada ya muda, watendaji wa Marekani walianza kugundua kwamba baadhi ya bidhaa za Kijapani zilikuwa bora kuliko wenzao wa Marekani. Kampuni ya Ford Motor Company ilianza kutengeneza magari katika miaka ya 1950 na ilitoa aina mbili za magari, moja yenye gearbox ya Marekani na nyingine yenye gearbox ya Japani. Wakati wateja wa Ford walipoanza kuomba gari na usambazaji wa Kijapani na walikuwa tayari hata kusubiri, wahandisi wa Ford walitaka kuelewa kwa nini, kwani usambazaji ulifanywa kwa vipimo sawa. Kwa hiyo, walichunguza vipande vyote viwili vya gia na kugundua kwamba sehemu zilizotumiwa katika kipande cha gia cha Kijapani zilikuwa na tofauti ndogo sana. Katika injini za Kijapani, kila sehemu ilikuwa ndani ya 1 16 ya vipimo, wakati sehemu za Marekani zilikuwa ndani ya 1 8th. Hilo lilifanya magari yenye gia za Kijapani yaende vizuri zaidi, bila matatizo mengi. Licha ya utambuzi huu, bado ilichukua Ford miongo kadhaa, kabla ya kuwa tayari kupata juu ya bodi na harakati ya ubora wa Deming. Wakati huo ulikuja mwanzoni mwa miaka ya 1980. Ford ilipata hasara ya dola bilioni 3 kati ya mwaka wa 1979 na 1982. Kwa kushangaza, kampuni hiyo ilikumbukwa kwa sababu ya makosa ya kuhamisha. Katika juhudi za kubadilisha mambo, Larry Moore, Ford's mpya kuteuliwa Corporate Quality Mkurugenzi, kuajiriwa Deming kuanza ubora harakati katika Ford. "Mwanzoni mwa mwaka wa 1980, Deming alimwambia Moore kwamba ""hatua za usimamizi zilikuwa na jukumu la 85% ya matatizo yote ya Ford katika kuendeleza magari bora.""" Hiyo ni kwa sababu baada ya kufika Ford, Deming alihisi kwamba kampuni alikuwa na usimamizi wa juu zaidi asiye na uwezo yeye milele alikutana, na watendaji kutenda kama mabwana wa genge mapigano, kuangalia mabadiliko yoyote kama tishio kwa nguvu yao ya shirika. Hata hivyo, kazi ya ushauri ya Deming ilifaulu kubadilisha mambo. Mwaka 1986 Ford ilianzisha mfululizo wa Taurus-Sable. "Msimamizi wa Ford, Donald Peterson, aliandika wakati huo, ""Tunaelekea utamaduni wa ubora katika Ford na mabadiliko mengi ambayo yamekuwa yakitokea hapa yana mizizi yao moja kwa moja katika mafundisho ya Deming."" Mwaka huo huo, Ford ikawa kampuni ya magari ya Marekani yenye faida zaidi." Kwa mara ya kwanza katika miaka 40 Ford ilipata faida kubwa kuliko General Motors. Katika miaka iliyofuata, mapato ya kampuni iliendelea kuzidi General Motors na Chryslers. "Somo kubwa kutoka kwa makampuni haya yote ni rahisi lakini ya kina: kuzingatia tu ubora na kila kitu kingine kitaendelea kuboresha.""" Hii ni somo ambalo hata limekuwa kweli katika huduma za afya. Wakati mbinu za Deming zilipotumiwa na Dk Brent James katika huduma ya afya ya Intermountain, viwango vya vifo vya minyororo ya hospitali vilipungua kwa maelfu kwa mwaka, wakati gharama za uendeshaji zilipunguzwa kwa mamia ya mamilioni ya dola katika miaka michache tu. Dk James ni heralded kama moja ya watu iconic zaidi katika historia ya kuboresha mifumo ya ubora. Hata gazeti la New York Times haliwezi kuandika makala ya habari juu yake ambayo ni chini ya maneno 8,000. "Kama ilivyoelezwa katika makala ya kwanza ya jarida la ""The Daily Mail,"" Dr. James Deming aliandika kuhusu jinsi alivyoweza kuokoa maisha ya watu 2,000 kwa mwaka, na kupunguza gharama za hospitali kwa mamia ya mamilioni ya dola."