Deming's way out of the crisis pdf. Edwards Deming "Overcoming the Crisis"

Edwards Deming is a famous American economist, author of the theory of the “quality revolution”, one of the creators of the “Japanese economic miracle"and prophets of a new economic era. His book “Overcoming the Crisis” is studied in leading business schools, and many entrepreneurs consider it the most important work on management theory. Deming formulated his ideas in the form of 14 principles of the transformation program. With the permission of SmartReading, we are publishing a summary - a “condensed” version - of Edwards Deming’s bestseller “Overcoming the Crisis.”

SmartReading is a project by the co-founder of one of the leading Russian publishing houses of business literature, Mann, Ivanov and Ferber, Mikhail Ivanov and his partners. SmartReading produces so-called summaries - texts that concisely present the key ideas of best-selling books in the non-fiction genre. Thus, people who for some reason cannot quickly read full versions books, can get acquainted with their main ideas and theses. SmartReading uses a subscription business model in its work.

1. Transformation principles
Western management system

Improving quality at all levels of the production system of goods and services leads to increased productivity by reducing the number of errors and time to correct them, and more productive use of equipment and materials. This, in turn, creates conditions for expanding production, strengthening the company’s position in the market and creating new jobs. Low quality, on the contrary, leads to a decrease in production efficiency.

From 15 to 40% of the price of any product made in the United States is hidden losses from unproductive use of equipment, production of defective products and unreasonable increases in overhead costs.

Management plays a key role in improving quality, but success requires the concerted efforts of everyone in the company. Any employee must have a clear understanding of how the company’s management works and be able to evaluate its performance according to established parameters.

Deming's 14 principles are the basis of the transformation program. They are applicable everywhere: for large and small companies, in industry, in services or in public administration.

Principle 1: Make the pursuit of quality your constant goal.. Consistency of purpose is the desire to maintain business through the production of continuously improved goods and services. The goal of the business is to satisfy the consumer as completely as possible and improve the quality of life. Consistency of purpose requires the allocation of resources for long-term planning, studying likely fluctuations in demand, marketing costs and ongoing staff training.

Principle 2: Change your thinking style. Business cannot be done using traditional methods because the world has changed. There is a need not just for a few new principles, but for a radical rethinking of your business concept. The delays and defects that are part of our production system cannot be tolerated. To solve any problem there must be one clear and productive plan, which is guaranteed to work. Alternative plans that take into account possible errors and delays are very costly.

Principle 3: Eliminate mass inspections and controls.. Quality must be built into the products. 100% quality control of manufactured products is a belated, unreliable and expensive measure. Quality is ensured by improving the production process. Only work with reliable materials and components in statistically controlled processes will allow you to create a truly high-quality product that guarantees your success with the consumer.

Increasing the number of checks increases the price of the product, but does not guarantee its quality. Shared responsibility means no one is held accountable

The author gives a story about a printing house where each layout was read 11 times. At the same time, the manager was inundated with customer complaints about errors: each proofreader relied on the others and did not do their job properly. On the contrary, checking small batches of goods to maintain process control charts, performed regularly and professionally, based on statistical methods, will bring the production process into a state of statistical control, in which its further improvement will be possible.

Principle 4: Reduce the number of suppliers and focus on long-term relationships.

The practice of selecting suppliers based solely on price must be abandoned. Require confirmation of the quality of the product and its compliance with the parameters of your production. The goal of procurement should be to achieve minimum total costs.

Focus on one supplier and build relationships with them based on trust and loyalty. By guaranteeing a long-term relationship, the supplier becomes a partner, which means that he is a reliable source of goods and services, understands the needs of his buyer and quickly responds to them, and guarantees after-sales service.

If you work with one supplier, the time spent on reconfiguring equipment is reduced; the amount of documentation is reduced and simplified accounting; the problem of finding means of transportation is solved.

Principle 5: Continuously improve the production and service system. Work on every process of planning, production, after-sales service. In any process, further improvement is possible.

Principle 6: Make training and retraining of all employees, including managers, an important part of the work process. The costs of training are not comparable to the benefits of quality work.

Principle 7: Change the status and functions of managers. The manager (master) is not an overseer, but a leader.

Lower-level managers should control quality rather than quantitative indicators. To do this, you need to know the work of the staff and have the authority to inform senior management about necessary changes. The adjustments they propose must be mandatory for implementation.

A leader needs practical experience. Young college graduates cannot help, teach, or overcome the hostility of the workers. Management comes down to controlling numbers and percentages.

Principle 8: Create a confident and safe workplace. Fear cannot be an effective incentive to work. Fears, mistrust and hostility must be eradicated.

Examples of real fears of employees are numerous: fear of losing their job, expressing new ideas, pointing out a mistake to management, etc. Out of fear, people may hide problems from management. For example, a foreman knows that a line needs repairs, but the fear of not meeting his daily quota forces him to continue working at the risk of an accident.

Principle 9: Break down barriers between departments. What is needed is not sub-optimization of departments, but teamwork for results. It will make it possible to compensate for the weaknesses of some with the achievements of others. To ensure that people from different services and departments understand each other, use the language of statistical methods.

Principle 10: Avoid empty slogans and campaigns. It's not that people are lazy or don't want to do better. Most difficulties are rooted in the system. The slogans are simply addressed to the wrong people and cause distrust in management.

Calls like “Let's increase productivity in the current quarter by 10%” raise legitimate questions: 1) How are you going to do this? and 2) Why haven't they done this yet?

Principle 11. Eliminate arbitrary quantitative production standards. Standards are set for the average worker. Half could work better, for the other half it may be impossible to meet the standards. This leads to dissatisfaction and staff turnover. Piecework wages also negatively affect the result, increasing the percentage of defects. The employee must know for sure that his task is to produce high-quality products that he can be proud of.

For example, a customer service manager is required by job description to answer 25 calls per hour, be polite and not rush customers. It is obvious that this is impossible and that the duration telephone conversation depends on many factors. The employee does not understand what his job is and cannot help but feel stressed. The sole objective of the employee should be customer satisfaction, and the data needed to develop the budget should be obtained by recording and distributing actual results and subject to constant adjustment.

Principle 12: Give employees the opportunity to take pride in their work.. To do this, you need to abandon ratings. Workers cannot do a good job if they are forced to work with defective materials or equipment, waste time correcting flaws, or face incompetence or disinterest from management. Absenteeism and turnover are reduced when workers feel valued and can take pride in their work output.

Principle 13: Encourage the pursuit of education. Production needs specialists. Training does not solve immediate problems, but expands the capabilities of employees and the company.

Principle 14: Take action to create change.. The optimization process depends on the involvement of senior management. Create a structure that will monitor daily compliance of the company's actions with the 13 listed principles. Involve every company employee in the optimization process. Achieve consistency. It's not enough to make an effort. You still need to know what to do. Perform constant monitoring results achieved and process optimization.

2. Diseases and obstacles

The Western economy is experiencing serious difficulties. There are problems without overcoming which it is impossible to move forward. Deming calls them " deadly diseases" The most destructive of them:

Ratings and certifications for personnel.
Management based only on quantitative indicators.

Ratings make the employee responsible for the costs of the system and generate intrigue and hostility. Some workers need help, others could help them if not for the certification system. Interest in personal quantitative indicators destroys team spirit and makes work to improve quality unprofitable. It is wrong to think that quality indicators depend only on the conscientiousness of employees. Their contribution is very limited.

For example, if the goods in a store do not meet the needs or incomes of the residents of the area, the store will go out of business, no matter how well the staff performs.

Quantitative indicators can be easily improved by reducing research or training costs. Will this make the business more successful in the future? Of course, numerical criteria are necessary for planning and accounting. But the most important quantities for management cannot be foreseen and expressed in numbers.

How to measure the profit from the satisfaction of a customer who recommends your product to someone else? How do employees’ trust in management and pride in their work affect quality?

In addition, there are obstacles that are just as dangerous, but can be eliminated more easily. These include, for example:

Hope for quick results from the measures taken. Coming out of a crisis is long and requires team effort. The smallest achievement is important because it gives people the opportunity to be proud of their contribution to the job.

Search for ready-made recipes. There is no way to predict how successful other companies' methods will be in your case. Copying without knowledge of the theory is risky. You can disassemble a Steinway grand piano into parts, make similar ones and assemble them. This does not mean that your product will play.

Confidence in the uniqueness of your own problems. Despite the diversity of businesses, the principles for increasing productivity are universal.

Outdated training programs , especially problems in the study of statistics.

The deceptiveness of the “zero defect” principle. Taguchi's quality loss function shows that losses increase for any deviation from the nominal value, even if these deviations are within tolerance.

3. Quality and consumer

Ideas about quality are changeable and consist of various components that are not always quantifiable. Quality parameters will be different for different categories of consumers.

For example, the quality of a book will be determined differently by the printer, publisher, author, and reader. It is even more difficult to determine the parameters of the quality of services, for example, medical or educational.

In order to anticipate possible changes in requests, it is necessary to study consumer behavior. The process of communication between manufacturer and consumer (real and potential) is supported through sampling and product testing. The manufacturer receives information about who buys its products and why, and can improve it based on the needs of the user.

In the traditional administration system, the production process is represented as consisting of three stages: development, production and sales. New system management requires the introduction of a fourth stage: checking the product in operation, studying the opinion of the consumer. The progressive repetition of these four steps should lead to a spiral of increasing customer satisfaction while decreasing costs.

To maintain consumer feedback, some companies conduct surveys using questionnaires. As a rule, consumers fill out only half of the questionnaires. Correct conclusions and predictions cannot be made based on incomplete data. It is more reliable to submit questionnaires to a certain number - say, a thousand - of suitably selected clients and conduct interviews with those who do not respond. This will help reduce research costs while making it more reliable.

4. Some new principles
training of personnel and managers

Manager's tasks:

using statistics, find out which of your subordinates’ work does not fit into the system, help those lagging behind and encourage the best;
improve the system, enabling everyone to do a better job;
achieve consistency in employee actions and stability of performance.

Vocational training is necessary for newly hired workers. An important element management are control charts and graphs showing the approximation of each employee to the indicators of the statistical norm during the training process. If results no longer improve, the training is no longer helping and should be stopped.

If a worker cannot achieve the statistical norm, the reason for this should be found (poor vision, lack of lighting, poor tools, etc.). It is not economically feasible to train an employee whose results are stable but not satisfactory. It is better to transfer him to another job, having previously trained him.

If an employee's performance consistently exceeds the norm, he may have knowledge or skills that could help others

Before deciding to fire an employee, you should take into account the average distribution of abilities among those who have not completed training and the cost of training the employee.

There is a high probability of unplanned changes that may disrupt the stability of results: a new product, new tolerances, new indicators of the control department, personal problems of the employee. You cannot rely on past experience.

5. Operational definitions and standards

Industrial production is possible only on the basis of operational definitions obtained by statistically controlled and reliable methods. The operational definition invests abstract theoretical concepts with an empirically observable, measurable and transferable meaning that should be understandable to all participants in the production and exploitation process.

For example, “round” in the Euclidean sense cannot be created in a specific production; precise parameters are needed for the permissible deviation of a real object from an ideal circle.

No measurement method is perfect. The preferred procedure is the one that gives results that are closest to the required results, and at the same time is cheaper or more accessible than alternatives.

Any quantitative indicators depend on the measurement procedure. Change the procedure and you will get different indicators. In each specific case, a plan is required that proves the reliability and statistical controllability of the measurement system used.

State (mandatory) standards are appropriate if the benefits of their implementation exceed the costs

There is an area that can be regulated by a system of non-binding standards that are developed by the business itself and agreed upon by stakeholders. Voluntary standards reduce costs and give greater freedom to business.

The lack of common standards for individual industries hinders industrial development. No single company is well positioned to provide consumers with the best choice at the lowest cost.

6. General and special causes of variability
and stable system

Effective management is impossible without understanding the concept of variability. Improving the system requires reducing the number of variations and bringing them to the statistical norm. There are general and specific causes of deviations, and measures to eliminate them vary.

Most problems, defects and errors are generated by the system ( 94%, according to Edwards Deming's calculations). Treating them as isolated cases only destabilizes the process. Further improvements require systemic changes that are within the purview of management.

Sometimes defects are local and caused by special reasons (6%). Responsibility for their detection and elimination lies with those directly involved in this operation. However, workers need help to fix the problem.

Visual demonstration theoretical provisions serves as an experiment with red beads. A tray with white beads has 25% red beads added. Workers must take a sample of white beads using a 50-cavity scoop, plunging it into a tray. The number of red beads in the sample determines the percentage of defects. The distribution of results will inevitably be chaotic and unpredictable, regardless of the diligence or skill of the worker. Slogans, employee certification and similar measures will not bring results. The reason lies in the system - the presence of red beads. Eliminate them, and the process can be controlled.

If a workflow is in an uncontrolled state, it is unpredictable and no objective measurements can be made to optimize production. First of all, it is necessary to bring the work process to a state of statistical controllability, eliminating special causes of variations. All variations are recorded on employee control charts developed by Walter Shewhart. They are three-level graphs that indicate the desired parameters of the product, as well as the limits of deviations. If the deviations are outside the control limits, we are dealing with a special case and managerial intervention is required to eliminate the special cause of the failure or (if the results are better than the upper limit) to learn from the employee's experience or methods that may be useful to others.

To eliminate a problem, you need to go from its source to its result. Trying to influence outputs by examining the end result (especially just defects) will not lead to improved quality. In many cases, simple, rational solutions are required. Reducing errors and increasing efficiency can often be achieved by simplifying documentation and eliminating unnecessary steps.

The worker must fill out a card, calculating the total amount of working time, and have it signed by the foreman. If you transfer all calculations to the accounting department and leave one person responsible for filling out the document, the number of errors will sharply decrease.

We should not assume that solutions are always primitive. To optimize the process, statistical studies taking into account multiple factors are required. Testing on a single parameter may miss important relationships.

7. Minimizing costs for quality control of materials
and finished products

To minimize costs when testing raw materials or components in statistically controlled processes, use the all-or-nothing principle.

Let us denote the cost of checking one part as K1, and the cost of dismantling and remaking the product in the case of using a defective part - K2. K2 is always greater, so the ratio K1/K2 is between 0 and 1.

If the worst batch of original parts has a proportion of defective parts less than K1/K2, no control is required.
If the best incoming batch has a proportion of defective products greater than K1/K2, control should be 100%.
If you do the opposite, the costs will be maximum.

Let's assume that a TV manufacturer tests every incoming chip, although the number of defective chips is negligible: 1-2 per 10,000. With 60 chips in a TV, testing losses will be about 10% of the cost.

Confidence that the incoming batch meets specified conditions can be ensured by the use of control charts. The buyer must check incoming materials for compliance with the invoices.

The same rule applies to processes with deviations from statistical controllability, but not chaotic ones. If, using maps, it can be predicted that only a small part of the distribution of the proportion of defective products will fall in the zone to the right of the point K1/K2, control tests can be abandoned. If the small part is to the left of the balance point, 100% control is required.

If raw materials are of unpredictable or inconsistent quality, sample testing may be used. In such industries, there is a correlation between the quality of samples and the rest of the product. An alternative to 100% testing could be Joyce Orsini's rules:

if K2 ≥ 1000 K1, 100% control is required;
if 1000 K1 > K2 ≥ 10 K (the average cost of testing a sufficient number of parts to guarantee the selection of high-quality ones), a sample of n = 200 should be tested. If there is no defect in the sample, accept the rest of the batch. If a defective product is found, the entire lot must be rejected.
if K2< 10 К1, проверку проводить не требуется.

In processes with many components, any defective part used in assembly can cause failure finished product. The probability of failure for any number of parts can be calculated using an Euler-Venn diagram.

Conclusion

Concept modern management, outlined by Edwards Deming in his book “Overcoming the Crisis,” makes it possible to achieve controllability of production, improving quality and reducing costs.

A key tenet of Deming's theory is commitment to quality.. Anyone who wants to build an effective business and stay in the market for a long time must make quality their main goal. Quality must be an integral property of the product and ensured by the entire production system.

Inspections and tests of the finished product increase its cost, but do not guarantee quality. You should restructure your thinking, abandon mass product testing and conduct quality control in accordance with statistical methods.

Important conditions for success are also the establishment of long-term partnerships with a single supplier, constant optimization of the work process, continuous training and self-education of personnel, rejection of empty slogans and campaigns and coordinated work of the entire company.

The company's employees, their creativity, and ability for continuous improvement are your main capital. Prosperity depends mainly on human resources and proper organization of work. The traditional system of rewards and punishments for employees does not contribute to increasing production efficiency. A system based on respect is needed. Eliminate fear and hostility, let people feel included in the system. Give them the opportunity to be proud of the results of their work.

If you want to stay in the market for a long time, study consumer behavior. Try to anticipate possible changes in demand.

Avoid numbers-based management practices. Understanding the nature of variability in production processes is necessary. The goal of optimization is to reduce variability. Remember that the vast majority of the causes of variation belong to the system, and only about 6% can be caused by single causes.

Effective production requires clear and understandable operational definitions for all participants in the production process. The lack of common, measurable and consistent standards hinders business development.

Edwards Deming

Way out of the crisis. A new paradigm for managing people, systems and processes

Translators Yu. Adler, V. Shper

Scientific editors Y. Rubanik, Y. Adler, V. Shper

Technical editor N. Lisitsyna

Editor N. Velichenko

Production editor S. Turco

Corrector O. Ilyinskaya

Computer layout K. Svishchev

Art director S. Timonov

Illustrator D. Izotov

All rights reserved. The work is intended exclusively for private use. No part of the electronic copy of this book may be reproduced in any form or by any means, including posting on the Internet or corporate networks, for public or collective use without the written permission of the copyright owner. For violation of copyright, the law provides for payment of compensation to the copyright holder in the amount of up to 5 million rubles (Article 49 of the Code of Administrative Offenses), as well as criminal liability in the form of imprisonment for up to 6 years (Article 146 of the Criminal Code of the Russian Federation).

Preface to the Russian edition

With agreement, the small grows; with disagreement, the greatest is destroyed.

From Sallust

My acquaintance with the management philosophy of Dr. Williams Edwards Deming began with a meeting with Grigory Nosonovich Fidelman, an admirer and popularizer of the ideas of the world-famous scientist in the Russian business community. Grigory Nosonovich gave me two books: “Alternative Management,” which he co-wrote with Yu.P. Adler and V.S. Dedikov, and "Dr. Deming's Space" by Henry Neave. After reading both books, I realized that the management philosophy described in this book and those listed above is nothing less than the basis for developing a business that is capable of achieving an international level of competitiveness.

After reading this book, you will discover 14 principles for building a globally competitive business, get answers to questions about how to unite people around one goal, how to achieve teamwork in the true sense of the word, how to create an atmosphere of trust between employees, between employees and management, between managers and business owners. It is difficult to overestimate the importance of such a derivative teamwork, as “collective wisdom”, at the stage of qualitative development of the company and for further increasing the profitability of the business, nothing can replace it. The red thread running through the book is the meaning of the category “trust” for successful business, how difficult it is to cultivate it and how carefully you need to treat such subtle matter. An important aspect financial well-being– building business management not on the basis of even the most objective numerical indicators, but based on an understanding of the variability (variability) of these indicators and the nature of variation. Another aspect that is also of great importance is the commitment to quality. The reader will discover unlimited possibilities, which provides continuous improvement in quality, where both the company and the buyer benefit as a result.

This book is especially useful for owners and senior management of companies. I'm sure you won't be disappointed. Even if you just read this work and do not apply the principles set out in the book, you will gain food for thought, gain knowledge about a completely different approach to business, and understand that when betting on winning over the long haul, it is important and necessary to rely on people working in the company, on their knowledge and experience. And you will definitely feel their gratitude for their trust, they will repay you with hard work and dedication.

Indeed, once you start reading “Overcoming the Crisis,” as well as Henry Neave’s book “Dr. Deming’s Space,” you understand the meaning of the word “consent.” IN lately Many tools have been developed for creating a successful business, one of the most popular is the balanced scorecard system (BSS) by Robert Kaplan and David Norton. The largest international companies began to hastily implement the BSC, because they believed that this was the very key that would give them a new impetus for development. At the same time, facts indicate that only less than 10% of Western companies have successfully implemented the BSC and thus implemented their own strategies. It has been noted that the main reason for failure is the low involvement of middle and below average level employees in the implementation of strategic plans. Naturally, various consulting companies specializing in the development of the BSC and its implementation offer all sorts of ways to solve this problem. However, all of the above is the tip of the iceberg, something that many have never seen hidden under water. Everything that is written in this book reveals to a greater extent the underwater part of this “ice mountain” and will give answers to many questions to which the dear reader, it would seem, has already despaired of getting an answer.

E.N. Begimbetov,

chairman of the board

Insurance company "London-Almaty"

Foreword by scientific editors

Message from a Troublemaker

Only knowledge can change the world, and nothing else.

Yukio Mishima

This book appeared a quarter of a century ago and was first published in the USA. The reason for its writing was the crisis that American industry was experiencing at that time. The book caused heated debate and divided the debaters into enthusiastic supporters and irreconcilable opponents. The controversy continues to this day, although after the author’s death in December 1993 (at the age of 94), its character has changed somewhat. The book has been reprinted several times; this translation is based on the 2002 edition. So why are we returning to the problems of a bygone era?

There are works done on occasion that do not lose relevance years later, and perhaps they will live for centuries. This is exactly the book you are holding in your hands now. This book was an attempt to answer the question of the causes of the crisis of American industry in the context of the Japanese competitive offensive in the late 1970s and early 1980s. And as a result, a work appeared summarizing the principles and methods of a new approach to management, which can only be called revolutionary.

Unfortunately, until recently the Russian reader did not have the opportunity to become familiar with Deming’s teachings in any detail. And although the first attempt to publish this work of the professor in Russian was made back in 1994 (1), the quality of the translation and publication did not allow the book to win the mass reader.

As far as we know, the first publication about Deming in Russian appeared in the journal “Course on Quality” (1991) (2). This was a magazine version of the first chapter of Nancy Mann's book (4). Almost immediately after this great article about Deming appeared in the magazine “America” (5), published in Russian. It was written by the talented American journalist L. Dobyns, the author of the text for the famous television report “If Japan Can, Why Can’t We?”, which was shown by NBC in 1980. It was after this report that Deming became famous in America. In 1998, the book by Yu. Adler and L. Makhovikova, “Should a Country Be Poor?”, was published, which briefly described the essence of Deming’s teachings (6).

However, no matter how much they write about Deming and his teaching, so far, in everyone’s opinion, the best introduction to the world of the management concept he created is the book by his student and friend Dr. Henry Neave. The path of this book to the reader was also long and difficult. The first part of the translation of the book was published by the Committee for higher school Russian Federation in 1996 (7). We had to wait five years for the second part until it was published by the publishing house “Standards and Quality” (8). It was only in 2005 that both parts finally came together in the book “Dr. Deming’s Space: Methods for Building a Sustainable Business,” published by Alpina Business Books (9). In the preface to this publication, we said that for complete happiness, the Russian-speaking reader only needs an adequate Russian translation of Deming’s book “Exiting the Crisis.” And now I want to believe that the happy moment has arrived. Now the Russian reader can get acquainted with Deming’s teachings not only through talented, but still retellings and interpretations, but also “hear the voice” of the doctor himself, which will undoubtedly give a synergistic effect.

The book is good, but very difficult to read. Maybe I think so because I'm spoiled by books like "Customers for Life" and "Selling the Invisible." But it's actually a bit heavy.

Firstly, despite the title "Out of the Crisis", this book is not about the modern crisis. It was written somewhere in 1980, and translated into Russian only in 2007. Of course, the production problems discussed in it are still relevant today. But the presentation form is “heavy” for today’s reader.

Secondly, the book contains many references to mathematical statistics. If you are not good at mathematics at all, you will be bored by all these variances, sigmas, limits, etc. And without them it will be completely incomprehensible.

Thirdly, the book contains a huge number of examples from the author’s work experience. Examples of errors from various enterprises. Not just different, but very, very different. I have always believed that the flaw of many business books is an excess of theory and a lack of examples. But it turned out that the opposite happens.

Once again I would like to clarify - the book good, but very heavy.

If I try to briefly convey the main thoughts, I think it will come out as follows:

1. A book about quality. The main idea, repeatedly proven in it, is that increased quality leads to increased productivity. If you're willing to just believe it, you don't have to waste time reading all this evidence. But basically the order is this: the higher the quality, the lower the cost of correcting errors. Perhaps if you consider how much it really costs you if you didn't do it right the first time, you'll understand right away.

2. Quality must be achieved not at the end of the production cycle, but from the very beginning. Testing, control, measurements, sampling - do not in themselves lead to improved quality. They only provide data for statistical analysis, which helps to separate common causes from special ones. Using this data, it is necessary to direct your efforts to correct the process itself or the conditions in which it occurs in order to improve the quality of the resulting product. Quality must be "built into the product".

3. It is necessary to distinguish between general and special reasons for marriage. They can only be distinguished using statistical analysis methods. Common causes of marriage are those caused by the system and appearing consistently. Special causes are causes caused by special, episodic circumstances. Example: a worker sharpens nuts. The diameter of the nuts “floats” with a spread of 1 mm. If the scatter appears consistently ( "is in a statistically controlled state"), then there is no point in trying to blame the worker for this. This means that the system itself (machine, workpieces, working conditions, worker training system) generates such quality. It makes no sense to motivate a worker to best quality. If the result is stable, it is most likely that he will not be able to improve it. These are common reasons. We need to change the system. Set up a machine, change supplier of workpieces, etc. But if deviations, say 2 mm, occur sporadically and "beyond statistical expectation", then these are most likely special reasons, and they may be associated with the worker themselves (he went out drunk, buried his mother-in-law, his eyesight deteriorated). When general and special causes are confused, the result is negative.

4. Management is responsible for everything. As should already be clear from point 3, the system is to blame for most marriages. And the system is controlled by managers. Therefore, only management, which has the power to influence the system (replace a machine or supplier, or the entire technical process in general), should be responsible for quality. Management should use test results to detect problem areas and correct them. And not just to weed out defective parts and punish “guilty” performers.

5. Quality improvement is a continuous and constant process. Since 1950, Japan began to transform into a great industrial power, precisely relying on the work of Deming. They set themselves the national goal of not just improving quality to the designated tolerances, but constantly improving quality. Always. The diameter of the nut began to deviate by only 0.001mm? Great. We continue to think about how to improve it further. (Although here, of course, it is worth remembering Goldratt’s principles and directing your efforts primarily to what is the greatest limitation)

6. You should not give quantitative goals to employees. If an employee is motivated to fulfill the plan, he will do it “at any cost.” The plan does not allow the employee "proud of his work". Instead of such motivation, you need to improve the system itself so that it allows you to produce the volumes you need. And the employee must be motivated for quality. So that he can be proud of his work.

What practical conclusions could be drawn?

For software developers: To have fewer bugs, you don’t need to hire more testers. We need to work on the formulation of the problem and on the interaction between the director and the developer. Train programmers.

For restaurateurs: to keep guests happy, there is no need to change waiters and cooks like gloves. We need to train them. Investigate what prevents them from performing well and correct it. Broken stove? Freezing terminal? Rotten food? By the way, this also applies to suppliers. Deming recommends reducing the number of suppliers as much as possible and building long-term relationships with them. Motivate them with the terms of the contract for quality products and timely deliveries. Patiently train them too.

In general, the final thought is this: if you want to turn your enterprise into a superpower, work on quality!

Now I will think what practical application These principles can be found in the accounting system...

Details:

This book is for those who have already realized that business cannot be conducted using traditional methods, because the world has changed. Edwards Deming, an outstanding consultant of the 20th century, one of the authors of the “Japanese economic miracle,” poses an intellectual and moral challenge to the stereotypes of traditional management. His revolutionary theory offers the philosophy, methods and management technologies necessary to build a sustainable, efficient business that balances the interests of all stakeholders: consumers, employees, owners, suppliers, and society as a whole. The proposed principles and concepts are illustrated with numerous examples from various industries industry, services and management. The book will be of interest to managers at all levels, entrepreneurs, engineering and technical workers, as well as teachers and students of organizational, management and engineering specialties.

Edwards Deming - Way out of the crisis. A new paradigm for managing people, systems and processes read online

Way out of the crisis. New paradigm managing people, systems and processes. Author of the book Edwards Deming, title: Out of the Crisis. A new paradigm for managing people, systems and processes. Genre: Management, personnel selection, year of publication 2014, Moscow, publisher Litagent "Alpina", isbn: 978-5-9614-3893-2.

Edwards Deming

Way out of the crisis. A new paradigm for managing people, systems and processes

Translators Yu. Adler, V. Shper

Scientific editors Y. Rubanik, Y. Adler, V. Shper

Technical editor N. Lisitsyna

Editor N. Velichenko

Production editor S. Turko

Proofreader O. Ilyinskaya

Computer layout K. Svishchev

Art director S. Timonov

Illustrator D. Izotov

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Preface to the Russian edition

With agreement, the small grows; with disagreement, the greatest is destroyed.

From Sallust

My acquaintance with the management philosophy of Dr. Williams Edwards Deming began with a meeting with Grigory Nosonovich Fidelman, an admirer and popularizer of the ideas of the world-famous scientist in the Russian business community. Grigory Nosonovich gave me two books: “Alternative Management,” which he co-wrote with Yu.P. Adler and V.S. Dedikov, and “Dr. Deming’s Space” by Henry Neave. After reading both books, I realized that the management philosophy described in this book and those listed above is nothing less than the basis for developing a business that is capable of achieving an international level of competitiveness.

After reading this book, you will discover 14 principles for building a globally competitive business, get answers to questions about how to unite people around one goal, how to achieve teamwork in the true sense of the word, how to create an atmosphere of trust between employees, between employees and management, between managers and business owners. It is difficult to overestimate the importance of such a derivative of teamwork as “collective wisdom” at the stage of qualitative development of the company and for further increasing the profitability of the business; nothing can replace it. The red thread running through the book is the meaning of the category “trust” for a successful business, how difficult it is to cultivate it and how carefully one must treat such a subtle matter. An important aspect of financial well-being is the construction of business management not on the basis of even the most objective numerical indicators, but based on an understanding of the variability (variability) of these indicators and the nature of variation. Another aspect that is also of great importance is the commitment to quality. The reader will discover the unlimited possibilities that continuous quality improvement provides, with both the company and the customer benefiting as a result.

Indeed, once you start reading “Overcoming the Crisis,” as well as Henry Neave’s book “Dr. Deming’s Space,” you understand the meaning of the word “consent.” Recently, many tools for creating a successful business have been developed, one of the most popular is the balanced scorecard system (BSS) by Robert Kaplan and David Norton. The largest international companies began to hastily implement the BSC, because they believed that this was the very key that would give them a new impetus for development. At the same time, facts indicate that only less than 10% of Western companies have successfully implemented the BSC and thus implemented their own strategies. It has been noted that the main reason for failure is the low involvement of middle and below average level employees in the implementation of strategic plans. Naturally, various consulting companies specializing in the development of the BSC and its implementation offer all sorts of ways to solve this problem. However, all of the above is the tip of the iceberg, something that many have never seen hidden under water. Everything that is written in this book reveals to a greater extent the underwater part of this “ice mountain” and will give answers to many questions to which the dear reader, it would seem, has already despaired of getting an answer.

E.N. Begimbetov, Chairman of the Board of the London-Almaty Insurance Company

Preface scientific editors

Message from a Troublemaker

Only knowledge can change the world, and nothing else.

Yukio Mishima

As far as we know, the first publication about Deming in Russian appeared in the journal “Course on Quality” (1991) (2). This was a magazine version of the first chapter of Nancy Mann's book (4). Almost immediately after this, a large article about Deming appeared in the magazine “America” (5), published in Russian. It was written by the talented American journalist L. Dobyns, the author of the text for the famous television report “If Japan Can, Why Can’t We?”, which was shown by NBC in 1980. It was after this report that Deming became famous in America. In 1998, the book by Yu. Adler and L. Makhovikova, “Should a Country Be Poor?”, was published, which briefly described the essence of Deming’s teachings (6).

However, no matter how much they write about Deming and his teaching, so far, in everyone’s opinion, the best introduction to the world of the management concept he created is the book by his student and friend Dr. Henry Neave. The path of this book to the reader was also long and difficult. The first part of the translation of the book was published by the Committee on Higher Education of the Russian Federation in 1996 (7). We had to wait five years for the second part until it was published by the publishing house “Standards and Quality” (8). It was only in 2005 that both parts finally came together in the book “Dr. Deming’s Space: Methods for Building a Sustainable Business,” published by Alpina Business Books (9). In the preface to this publication, we said that for complete happiness, the Russian-speaking reader only needs an adequate Russian translation of Deming’s book “Exiting the Crisis.” And now I want to believe that the happy moment has arrived. Now the Russian reader can get acquainted with Deming’s teachings not only through talented, but still retellings and interpretations, but also “hear the voice” of the doctor himself, which will undoubtedly give a synergistic effect.

Deming created an innovative theory of management. According to Albert Einstein, the sign of a truly new, breakthrough theory is that it seems “abnormal” or “crazy” to its contemporaries. From the very moment of its appearance, Deming's theory has posed not only an intellectual, but also a moral challenge to everyone who tries to study it, much less apply it in practice. And evidence of this is Deming’s numerous and often harsh criticism. And although his arguments are based on a systems approach and the theory of variability, it seems that modern society for the most part is not ready to accept these arguments (10).

This means that the stated theory offers not only a new conceptual, scientific and methodological basis for management, but also a different worldview, a different value orientation. It requires a profound transformation of modern practice, in which the interests and needs of people - consumers, employees, managers - and society as a whole are subordinated to a narrow, myopic interpretation of the economic interests of capital owners. It was not for nothing that Deming’s contemporaries in the United States called him the “pink professor” and “revolutionary of capitalism.”

You can understand the origins of this revolutionary theory if you remember who Deming studied with and whose ideas he relied on.

Deming had great teachers and colleagues. Deming's first teacher and senior friend was Walter Shewhart (1891–1967) (11, 12), an outstanding statistician who called himself a “tough engineer.” Shewhart is known as the founding father of statistical process control methods; he created the concept of cost-effective quality. Although Deming never forgot to express his gratitude to Shewhart, he significantly developed his doctrine of the statistical nature of variability (variation) and transferred it from the sphere of production to all types of processes in social systems.

It should be noted that Deming also studied with the eminent astronomer Sir Ernest Brown and the great statistician and geneticist Sir Ronald Fisher. He collaborated with one of the greatest American statisticians of the last century, John Tukey, and with the great Indian statistician Prasanta Chandra Mahalanobis.

Let us add to this that Deming at various times worked with brilliant specialists in the field of censuses and statistical surveys, and collaborated with the leading masters of the application of statistical methods in quality control, Roming and Dodge.

Thus, the foundations of Deming’s worldview and methodology as a scientist and researcher were formed in the field of exact sciences, primarily in the field of statistical theory and its applications to solving problems in practice. It is no coincidence that even after becoming a recognized guru, the author of the original concept of management, on his business card he designated himself as a “statistician.”

And although the logic of his work subsequently took Deming far beyond the sphere of interests of professional statisticians, they nevertheless continue to consider him one of their own (13). In 2000, when the 100th anniversary of Deming's birth was celebrated, the famous American statistician Jerry Hahn distributed an interesting questionnaire to his colleagues regarding Deming and his legacy (14). The questionnaire asked to answer the question of what Dr. Deming succeeded and failed to do. Of course, it was the statistical aspects of Deming's teaching that were most hotly discussed. Many statisticians were not ready to share his point of view. The fact is that Deming radically revised the classical theory of statistical inference. He brought it into line with the theory of variability developed by Shewhart and supplemented by himself. This led to many years of controversy and varying interpretations of Shewhart's control charts. The bone of contention is the idea of statistical controllability of processes, which goes back to classical ideas about the representativeness of a sample. But only Shewhart and Deming gave these concepts an operational meaning, thereby making them suitable for practical use. In addition, in recent years rapid development of the direction began, which from light hand Deming called it “statistical thinking.” Books, articles and dissertations are devoted to this topic. Let us note only one of the first monographs on this topic (15) and our works (16, 17) and give links to the works of his closest followers in statistics - Brian Joyner (18) and Donald Wheeler (19).

The discussion around Deming's statistical ideas will apparently not subside any time soon. Interestingly, Deming's student, Joyce Orsini, believes that all of Deming's endeavors were at least partially successful. And it’s simply too early to judge those that have not yet been implemented. The time will come for them too.

But this is, so to speak, a “home” discussion of interest only to specialists. What is important for us is that it was the inexorable consequences of statistical laws that forced Deming to reconsider the principles of management.

Another natural science component management method Deming, thanks to which the concepts of the lifelong learning cycle - PDCA (20) and operational definitions took a central place in it, has, if you like, a philosophical background. At the beginning of the 20th century. The scientific community, physics, and philosophy of science were experiencing a deep crisis associated with attempts to comprehend qualitatively new scientific results, relating to the laws of the structure of the micro- and macrocosm. The most important scientific “products” of this crisis were quantum theory and the theory of relativity. Philosophically, this turbulent period of scientific paradigm shift gave rise to the concept of logical positivism. One of the largest representatives of the physics community who contributed to the formation of this philosophical trend was English physicist and philosopher, Nobel laureate for his work in physics high pressures Paul Bridgeman. He formulated the principle of operationalism, which identified scientific concepts, which are used by the scientific community, with methods (operations) for measuring the corresponding parameters (21). Later, more developed, modern philosophical constructs replaced positivism as the basis of the philosophy of scientific knowledge. However, the extension of the principle of operationalism by W. Shewhart and E. Deming to the field of technical and business applications turned out to be extremely fruitful. “Business is much more precise than science,” wrote Deming. When applied to business and social problems, operational definitions of key concepts help prevent huge economic losses and help reduce risks. Operational definitions are of great importance for achieving mutual understanding and joint cognitive activity of people.

What did you do?

He taught the Japanese those working methods, thanks to which their industry is now considered one of the best examples. Raised all of Japan after World War II.

However, no one has ever been able to repeat Japan's success. Even the Americans couldn't. It's all about the special mentality of the Japanese:

What exactly does the legendary management consultant criticize in his book?

Analysis of quotes from the book:
In America, there is a common belief that quality and production volume are incompatible; you cannot have both at the same time. A clear answer to the question "Why does productivity increase when quality improves?" I received from 22 industrial workers when they met me, "Less rework. And less waste."

- How much can we reduce quality without losing consumers?
- This question is the height of misunderstanding of the problem. The Japanese follow the path of improving quality without looking at the numbers. This is how they increase productivity, reduce costs and conquer markets.

The Japanese are not idiots, but the Americans are not idiots either, no need to la-la. The American again asks about unnecessary processing, about additional operations. The American knows that improving the system is also not a free pleasure, and the higher we try to climb, the more expensive each next step is.

Just ask the Chinese, who have already captured the lion's share of world production. Do they win markets by improving quality? Haha! No! More details:

The Japanese improve quality without looking at the numbers. Okay, there's a counterexample. One company produced metal for its regular consumer. The metal had a certain degree of purification, that is, it always contained some impurities, which were difficult to completely get rid of. In general, the consumer was happy with everything, but the manufacturer decided to improve the quality, further increasing the degree of purification of the metal from impurities. This caused the price to rise slightly. The consumer was surprised why the metal suddenly turned out differently from what it had been before. According to the technology, they needed exactly the one they bought, with that degree of contamination. So they melted it themselves and added contaminants. This is not fiction.

And there can be many such examples. There is no need to improve the quality without looking. It is necessary to promote him wisely, which is what the American was interested in.
Moreover, this coincides with one of the 8 deadly sins - "Overprocessing". It is an attempt to add more value and quality to a product than the customer needs and is willing to pay for.

Manufacturing workers in Japan have always known that defects and errors that are visible to consumers lead to loss of market and can cost them their jobs.

In the Russian Federation, I have never seen workers think like this. In general, not a single book about Japanese manufacturing contains a single line about problems with motivation. It looks like there is simply no such problem there. They should be given respect, if only because they had no natural resources in their country.

A 200% quality control inspection is less reliable than a 100% inspection, because Each controller relies on the other controller, and signs without looking. Shared responsibility means no one is in charge.

That's for sure.

Deming's 14 Key Principles

I'm more for american style management, because it is 100% logical. The Japanese style does not always lend itself to logic, and sometimes looks like harmful advice specially written for enemies. But in fact, these tips only look harmful if they are integrated into American management in pieces. Then yes. They look organic only in Japanese style management, along with other principles.

1. Set a goal and be steadfast and persistent in achieving your goal of continuous improvement of products and services, allocating resources so that long-term goals and needs are met, not just short-term profitability, to achieve competitiveness, maintain the enterprise and keep people employed.

The opposite of this looks like this:

2. New philosophy: Adopt a new philosophy. We are in a new economic era started in Japan. We can no longer live with the usual level of delays, errors, defects in materials, defective work. A transformation of Western management style is needed to stop the continuing decline of the economy.

3. : Eliminate the need for mass testing and inspection as a way to achieve quality, primarily by “building” quality into products. Demand statistical evidence of “embedded” quality in both manufacturing and purchasing functions.

4. Instead, along with the price, demand serious evidence of its quality. Reduce the number of suppliers of the same product by refusing the services of those who could not statistically confirm its quality. Strive to obtain all supplies of a given component from only one manufacturer, based on establishing long-term relationships of mutual loyalty and trust. The goal in this case is to minimize total costs, not just initial ones.

5. Constantly improve, today and always, all your planning, production and service processes. Constantly look for problems in order to improve all activities and functions in the company, increase quality and productivity and thus constantly reduce costs. Continuous improvement of the system, including development and design, supply of components and materials, maintenance and improvement of equipment, management and organization methods, training and retraining of personnel is the primary responsibility of management.

6. Introduce modern approaches to training and retraining for all workers, including managers and managers, in order to better use the capabilities of each of them. Keeping pace with changes in materials, methods, product design, equipment, technology, functions and service methods requires new skills and abilities.

7. Understand and practice leadership as a way of working to help employees do their best work. Managers at all levels should be responsible not for bare numbers, but for quality. Improved quality automatically leads to increased productivity. Managers and managers must ensure that immediate action is taken when receiving signals of defects, faulty or broken equipment, poor tools, unclear work instructions, and other factors detrimental to quality.

8. Encourage effective two-way communication and use other means to eliminate fear, apprehension, and hostility within the organization so that everyone can work more effectively and efficiently for the benefit of the company. Any employee who is afraid of his superior cannot cooperate properly with him. The best that can be expected in such circumstances is resentful submission, which is exactly what such a leader desires. However, such a state of affairs will never lead to good results. True collaboration achieves much more than isolated individual efforts. But this interaction cannot be good without cultivating mutual trust, confidence and respect. Those who work in fear try to escape the sight of those they fear. How can you expect returns corresponding to potential opportunities from people whose main desire is simply not to be noticed?

It is clear that the person has never encountered motivating staff. In Japan there seem to be no such problems at all. In the Russian Federation, the employer tries to intimidate employees not because they have a good life, but because this is often the only way to force them to work. No, seriously, how are you going to implement this principle? Explain why anarchy and chaos will not arise?

Ok, take a look at this:

They shout in translation something like “I will do it, and today!!!”

They are ready to do this. Therefore, I can believe that they do not need to be further motivated by fears.

And you make these people yell (or treat their work) the same way:

Again. This is not a management book. This is a book on managing the JAPANESE. Even the Americans didn’t want to work like that. Well here you go , for example, not so. Everything for him is based on fear and violence. And what? He has rockets flying into space!

Want to see the real power of fear? Here it is:

This is an article about how the USSR developed economically faster than the leading capitalist countries. Most of the data presented in the article was indicated in statistical studies of Western scientists, the CIA, the IMF, the UN and the World Bank.The graph shown in the picture displays the ratio of GDP per capita of the USSR, RF and USA for 1885-2006. The compiler of the graph is A.N. Illarionov.