Demings 14 Points

In this article we introduce you to Deming's 14 management principles and how they have impacted the Lean Management System.

The person Deming

William Edward Deming was an American professor, engineer, and consultant who studied electrical engineering and mathematical physics before becoming a consultant. He participated in a variety of topics, including statistical process control, systems thinking, and the human psyche. His work as a quality management consultant for Japanese firms was possibly his most well-known accomplishment. As a result, the Deming Prize has been given out to this day.

Nowadays the PDCA-Cycle is well known globally (or Deming Circle). But fun fact – it initially was called the Shewart-Cycle based on his cooperation with Dr. Walter Shewart.

Deming’s 14 POINTS OF GOOD MANAGEMENT

Deming offers 14 principles that he has identified as success elements for effective organizational transformation in his book "Out of the Crisis." Here they come:

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1. To be competitive, set an unchanging business aim of consistent product and service improvement.

2. Put the new philosophy into practice. We are in a new phase of economic development, and (western) management must adapt to new circumstances.

3. Stop relying on quality assurance. Quality is not checked at the completion of the process but is built in from the initial stage.

4. Stop giving out contracts based on the lowest price. Instead, analyze a product's or service's entire cost. For each product, use only one supplier with whom you can develop a long-term and trusting connection.

5. Consistently and constantly improve the framework for manufacturing things.

6. Introduce "Training on the Job."

7. Introduce a fresh leadership style. The focus of leadership should be on assisting people and equipment in doing their tasks effectively.

8. Take away the system's fear. A culture that freely acknowledges mistakes aids in the identification of root causes, long-term solutions, and hence continuous improvement.

9. Remove the barriers that exist between departments. Purchasing, development, production, and sales must all work together to identify and address problems in production and service at the earliest possible time.

10. Employees who want zero errors or increased levels of productivity should avoid slogans and goals. Recognize that many of these goals are impacted by the system rather than by the individuals and that this incompetence demotivates employees.

11. Employees are no longer held to fixed quotas or performance targets. To make it clear to employees why tasks are important and should be completed, replace them with effective leadership.

12. Remove any barriers preventing employees from becoming proud of their work.

13. Introduce a holistic sublimed program that challenges and motivates each person's personal growth.

14. To enhance transformation, take the services of everyone in the organization.

Getting Demings principles IN THE LEAN MANAGEMENT SYSTEM

According to Deming, the 14 points of excellent management have evolved over time. While in the first point, he discusses relatively small-scale measures that facilitate a company's success, in the second point, he discusses large-scale measures that aid a company's success, the final principles are more basic statements about good business management.

In a lean workplace, we can apply any or all of the principles. Starting with a business vision that explains why the company exists and how it intends to improve over time. Continue with a new perspective on quality. Rather than employing a large number of quality control personnel to inspect the product at the end of the manufacturing process and, if needed, rework the product, the goal should be to incorporate quality into the product, this means that the manufacturing process should be built in such a way that manufacturing errors are avoided from the start (Poka-Yoke) or recognized quickly, allowing for a fast reaction rather than allowing the product to flow to the end of the line. This, of course, necessitates highly qualified staff who can best learn these abilities of immediate quality control directly at the process, as well as a culture that allows for the detection of errors without having to face negative consequences.

The style of thinking in value streams is another aspect of the Deming principles that becomes obvious. It explains how departments must coordinate to predict future difficulties in product manufacturing and services at an early stage. This demands strong cooperation among purchasing, development, sales, and production departments. He also states in principle four that decisions (such as purchasing) should not be made solely on the basis of the lowest offer but should always examine the whole expenses of a decision. What use is a 5 cent purchase price reduction if I have to budget for a 6-month replacement cycle in my warehouse? I have over 5 cents in expenses for storage, transportation, and stalled capital.

Another significant point is the shift in leadership perceptions. Deming is given the following quote:

It is the process, not the people.

Giving employees targets or piecework rates, in his opinion, makes no sense because they have no control over the results, which are decided by the system. Many people would now believe that if there are no goals, nothing will function. The distinction, in my opinion, is in the type of goals. If a corporation has a goal to grow by 10%, you might consider how to improve the system to meet this goal. You don't just hinder all of your employees' goals by 10%; you think about how you might reform the system.

Deming probably assumes that an employee is always prepared to give his all and that management is only demotivating him because it sets expectations for him that are unachievable in the current system. He goes on to say that staff wants to learn more and are always looking for ways to improve. This is a viewpoint that I can understand. When I consider the many employees I've met, I'm struck by how willing the young employees are to give their all and go hungry. Employees who have been disrupted for a long time by "the system" now only do what is necessary and seek challenges outside of work because they are not challenged or motivated at work.

I can only advise everyone to review the 14 Deming management principles again and again and to ask themselves which of the concepts are continuously followed and which are not.

FMEA

Failure Mode Effects Analysis - FMEA

The method of the FMEA - Failure Mode and Effect Analysis has been used for years in the automotive and manufacturing industry.

The risk analysis framework has been applied in a wide range of industrial sectors. The first areas of application were traditionally in product development. Based on this the integration of the production process planning and the production. In the automotive industry, the joint creation of FMEA for products and processes by Today customer, supplier and subcontractor are a natural part of a cooperation. 

The user is guided through the "10 Steps to Creation of the FMEA".

Step 1 - Review the process

• Use a process flow chart or an already existing value stream map to identify each part of a process

• List all process steps in a FMEA table

• If you think the list gets too long it might is. Use this chance to split up the process and cut the elephant. It makes more sense to work on smaller parts of the process instead of getting lost in the woods.

Step 2 - List potential failures

• Review all existing data and documents that can give you a hint about each component that can lead to a failure

• After having a complete list try to cut it down and to combine the parts of the initial list

• The chances are high that you will identify several potential risks of failures for each component

Step 3 - List potential effects of failures

• The effect is the outcome of a failure on the finished good or a process step

• It is common that not only one effect will occur for a single failure, don’t be suprised

Step 4 - Assign the level of failure to risks

• This is based on the consequences for each failure

• Think about the ranking as the worst impact that it can have

Step 5 - Assign the possibility of occurrence

• How high is the possibility of occurrence

• What impact will it have if occur

Step 6 - How can it be detected

• What are the chances that you will detect the failure before occurring

Step 7 - Calculate the RPN (Risk Priority Number)

• Severity (S)

• Severity x Occurence (S x O) = criticality

• Severity x Occurence x Detection (S x O x D) = RPN

Step 8 - Define the action plan

• With the decision making process followed by the prioritization from the RPN (Step 7) focus on the topics with the highest RPNs

• Follow a classic action plan by defining who will be doing what till when

Step 9 - Take action

• Get things done!

• Implement the defined improvement actions

• Follow the PDCA principle

  • Plan - done

  • Do - right now

  • Check - Step 10

  • Act - loop starts over

Step 10 - Re-evaluate the RPN

• Time to check on the impact of your actions

• Re-evaluate each potential failure identified and determine if the improvement measures have an effect or not

• If not follow the PDCA and start over with step 8

The FMEA is linked to all CIP and Kaizen activities - there is always something to improve.

PDCA

The idea behind the PDCA cycle is to empower employees to independently identify and solve problems. It is also a crucial element of the continuous improvement process (CIP).

Many projects in which a culture of continuous improvement (CIP) is to be anchored also fail because of the tools required for this. With the A3 Report, for example, there are such tools. Just for clarity upfront, problem solutions, decision bases and strategies are presented on a sheet of paper in DIN A3 format. The A3 Report provides employees with a kind of template for which analysis and action steps must be taken when solving a problem. This process, in turn, is based on a systematic approach: the PDCA cycle.

The four phases of the PDCA cycle

Of all the quality improvement tools, the PDCA cycle is the most important. It describes the basics of an improvement process and divides it into four phases:

Phase 1: Plan

In this phase the problem and the actual state are described, the causes of the problem are analyzed and the target state is defined. In addition, measurements for reaching the target condition is defined.

Phase 2: Do (Implementation)

In the implementation phase, the predefined measures for achieving the target status are fixed.

Phase 3: Check

In the review phase, the experience gained and the results achieved in implementing the measures are reflected and the measures are readjusted if necessary.

Phase 4: Act

In this phase, the experience is gathered and the problem-solving process is evaluated and standards for future action are derived.

PDCA Cylce

Teams always go through this process when they have identified a problem or a relevant opportunity for an improvement. Then a new PDCA cycle is started with the aim of establishing a new standard in the company which serves as a basis for further improvements. The following case study shows how working with the PDCA cycle works.

The PDCA cycle explained using a case study

The management board of an electrical motor manufacturer has adopted a new strategy to further expand the company's quality leadership in electric motor production and increase customer satisfaction. To this end, the management team defined the following so-called breakthrough targets:

• The production processes must be state of the art

• The work must be based on the zero-defect principle

• The striving for continuous improvement (CIP) should be anchored among the employees

These goals have been broken down to all levels. At a meeting, the head of department pointed out to the group leader that the five pressing lines he supervised produce less than the target of 35k motors per day. The consequences: Supply bottlenecks and customer dissatisfaction. The group leader should now solve this problem. In accordance with the PDCA cycle, the following procedure was followed.

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PDCA Phase: Plan

The group leader analyzed the production figures of the past weeks. He found that the joining line supervised by the team leader only delivers an average of 32k motors per day instead of 35k. The team leader suspected that this was due to high line rejects. They then took a look at the sorted motors in the quarantine stock. The result: the labelling on almost all rejected motors are displaced or not readable.

The group leader asks the team leader what could be the cause of the problem. His assumption: "The printer is not running perfectly and the application process is not stable. A check of the incoming labels has proven that all material is in specification, so the failure has to be within the printing and application process. The team leader then looked at the scrap figures in the shift reports. It turned out that over 80 percent of the rejected motors are produced during the night shift.

So the group leader and the team leader observed the labelling process in the following night shift. They noticed that the labeling belt occasionally jams in the conveyor belt, which is why the labels are applied offset to the desired location. The team leader suspected that this was due to the fact that the printer mounting and so the printer location was in the wrong position, a further analysis has shown that a new employee has been placed in the night shift and he didn’t understand the correct setting and placement of the printer after exchanging the labeling roll. In addition, it came out that the cartridge has to be replaced after 24 hrs which also was usually coming to the night shift. So the root cause was clear.

The group leader then asked the team leader to formulate a target state for possible countermeasures. He knows through trainings that targets should follow the SMART rule, but on this topic mainly measurable. He wanted to achieve the target by training the new operator. Done deal.

PDCA Phase 2: Do

But the group leader was not satisfied with that. He asked the team leader if he knew exactly how the operator were going to change roles and cartridges if there was a standard operation instruction (SOI) of this process and how to train new operators. The team leader denied this.

In the following night shift, they both watched the change of roles and cartridges by experienced and inexperienced operators. The experienced operators made sure that the labels did not touch the floor during the change and that the printer is in the correct position after replacing the role. The inexperienced, on the other hand, often rubbed the labels on the floor and just pushed the printer in the station without checking the first parts after replacement. Dirt gradually collected in the label dispenser, causing the tape to jam from time to time and the incorrect position of the printer led to misplaced and crushed up labels which in the end of line led to the rejects of the motors.

The group leader asked the team leader and his team to consider possible countermeasures, prioritize them and draw up an action plan. The countermeasures were among others: 

1. 5S sessions at the end of each shift to restore cleanliness and order in the line

2. Installation of training matrix in order to know how is able to follow the process and how is experienced enough to train new operators

3. Install a Poka Yoke fixture to ensure a process stable positioning of the printer

4. Install a counter with light indication when the cartridge of the printer needs to be replaced after an evaluated amount of labels printed

Based on the prioritization, the team members drew up an action plan. They also agreed:

The current status of the project is always documented on the cell board of the labelling line for the next three months

The progress figures are reported in the daily shop floor meeting – not the team meeting of the cell. It has mgt. focus.

PDCA Phase 3: Check

In the following weeks, the team leader of the cell reported daily the figures and the impact of the measures on the outcome. They also defined further measures on the basis of their experience to date. For example, the machine is always stopped when the label tape reaches into the light barrier, caused by an air blast. The measure was to install a duct for the carrier tape of the labels into a bin placed under the line, easily accessible for the line clean up at the end of the shift.  As a result, the reject rate fell by almost 80 percent after three months. The initially formulated target of 40 percent fewer rejects was achieved.

PDCA Phase 4: Act

After this assessment, the group leader asked the team leader what he wanted to do with regard to standardization. He replied that he would prepare a written description of the optimal process "maintaining the label printer" as well as for training new operators. In addition, from now on he will carry out a daily process control in order to detect target/actual deviations earlier.

The group leader praised the team leader and asked him at the next team leader meeting to inform the team leaders of the four other production lines about the new standard and the findings in the PDCA problem-solving process so that they could learn from the experience. Him himself informed the head of the motor production department that the problem of insufficient motor production had been solved.