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I do believe we need to improve our practice of Quality (and to do that we need to understand what happened in the past and why it was not more successful). The idea that Design of Experiments (DoE) was at the core of some Quality Movement to me is not at all accurate.
In my experience only a few Quality professionals today understand what it means and how it should be applied. The idea that it was common place in the 40’s I seriously doubt (though I don’t have first hand knowledge of this). I find it difficult to believe we would have decided to stop using DoE if it was commonly done previously. The understanding I have from those that should know (like George Box and previously my father – Bill Hunter) is that it was not at all common practice and still is not outside of a few industries and even there it is isolated in the domain of a few experts.I do have first hand knowledge of the 80’s and the idea that we did “employee training in problem solving, team activities and just-in-time inventory” well is not even close to accurate. We sent people to training on these things but other than JIT inventory the effectiveness of these efforts were poor (with a few exceptions that really did well).
“Quality” is not being practiced anywhere close to the level with which I am satisfied with in more than a few organizations. We have huge improvements to make in the practice of DoE, SPC, process improvement, having decisions made by the appropriate level (as close to the issue as possible), leadership, teamwork, data based decision making, the use of basically all the Quality tools, systems thinking, transformation… continue reading: Management Improvement History - Taguchi Loss Function
In practice, I have seen the concept of the Taguchi Loss Function used quite a bit. I have never actually seen any losses quantified and totaled and shown on a graph. I think focusing specifically on who suffers a loss and what that loss could be, can help. I think actually quantifying the losses to society can be daunting. So, while I see the value in framing the concept that way I think to actually get the losses quantified you are best served by starting with those closest to the process and then adding additional loses to those results.
Second, if you attempt to use the concept to help you manage (as a guide in decision making) the impacts to society are a factor, but, I think the loss to your company, the customer and perhaps the end user are most important. A negative impact to society at large is not going to have the same impact to a decision maker as the same negative impact to the customer. The decision maker will likely be willing to invest more to reduce the loss to a customer than to society at large (and that seems logical and sensible to me). continue reading: Taguchi Loss Function - Operational Excellence
Saying the organization is focuses on new principles (partnering, lean, etc.) is not the same as applying those principles with the great success that Toyota does. That difference is huge and is driving many companies to outsource and try to dramatically cut costs. Reducing costs should be the outcome of improving efficiency.
Toyota is successful manufacturing in the USA.
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I would agree that many companies don’t understand the critical importance of management excellence. Rather than take the difficult path to lead real change in their organization they focus on simple cost cutting measures (though usually not cutting executive salaries which have grown dramatically and are excessive in the USA compared to the rest of the world). That won’t work. continue reading: Operational Excellence - Price Discrimination in the Internet Age
The argument that you need to cripple products by geographic area to cope with currency fluctuations is false. It might be that a company wants to practice Price Discrimination to charge more where they can get more and less where they can get less. In the view of such a company, the internet, and other factors, have made it increasingly easy for people to buy in the low cost region and resell the items in the region where the company wants to charge higher prices. If you want to keep practicing price descrimination as a company you have to erect barriers to the free trade of your products by your customers. continue reading: Price Discrimination in the Internet Age - Theory of Knowledge
 When managing many fail to predict when attempting to test improvement ideas through what should be experiments (often they are just changes without verification the change produced a desired effect, any learning or study of the results of the change). Without prediction learning is much less (if there is any at all) than it would be with such prediction.
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With, even a fairly simple understanding of the theory of knowledge the effectiveness of management improvement efforts are greatly increased. This topic is difficult for most to understand, I recommend reading chapter four of the New Economics. continue reading: Theory of Knowledge - Control Charts in Health Care
The point of using a control chart, and many of the management improvement tools, are to improve the efficiency and effectiveness of resources spent improving. The trick is not really to improve (that is pretty easy) the trick is to improve quickly and effectively (and in a competitive marketplace to improve more quickly than competitors). Where improvement resources are targeted is critical. In deciding which improvement options to explore it is important to understand the impact on the outcome (in this case the health of the patient). continue reading: Control Charts in Health Care - Statistics for Experimenters – Second Edition
 Complete with applications covering the physical, engineering, biological, and social sciences, Statistics for Experimenters is designed for individuals who must use statistical approaches to conduct an experiment, but do not necessarily have formal training in statistics. Experimenters need only a basic understanding of mathematics to master all the statistical methods presented. This text is an essential reference for all researchers and is a highly recommended course book for undergraduate and graduate students.
This updates the classic text by George Box, William Hunter (my father) and Stu Hunter. continue reading: Statistics for Experimenters – Second Edition - Performance without Appraisal
 In the short article Performance Without Appraisal: What to do Instead of Performance Appraisals, Peter wrote:
Dr. Deming said of Performance Appraisals, “Stop doing them and things will get better.” He was correct. Many organizations, however, wonder what to do instead.
For those that do require “some alternative” Peter included some good ideas in The Leader’s Handbook(see chapter 9 “Performance without Appraisal pages 293 to 368). This chapter has excellent material for any manager. continue reading: Performance without Appraisal - Traffic Congestion and a Non-Solution
For decades traffic congestion has been a problem in American cities and one that has continued to get worse. The typical proposed solution is to increase the number of roads. The theory behind this solution is not normally stated but, I believe, it amounts to: “if we build more roads then the system will have more capacity which has to decrease congestion.” Unfortunately this theory fails to take into account the past data on the increasing capacity of roads “solution.”
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Ackoff’s solution does require actually changing the system. That is not easy to accomplish. However, if the desire is to reduce congestion the solution is not likely to be to just keep doing what we have been doing (given that it isn’t working). Building more and more capacity doesn’t seem to achieve the desired results. continue reading: Traffic Congestion and a Non-Solution - Targets Distorting the System
 I still remember Dr. Brian Joiner speaking about process improvement and the role of data well over a decade ago. He spoke of 3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult. continue reading: Targets Distorting the System - Could Toyota Fix GM
Yes, Toyota could fix GM. Even the right leaders and managers, within GM, could fix GM but it is a huge long term job and it would be harder to do it internally because you will have to do it while competing with Toyota. Also they have some difficult issues to deal with since their previous managers did not tihnk of the long term (20-50 years out from the decisions they were making in the 70s though 90s).
I wouldn’t buy GM if I were Toyota, though. Why bother. Just grow Toyota, it is working very well so far. It makes sense to buy if you need to grow quickly to gain critical mass, or you will lose the opportunity to grow early in a fast moving market. High tech companies (like Cisco and Intel) often do well buying other companies – but just as often high tech companies make more mistakes buying than is justified by the successes. continue reading: Could Toyota Fix GM - Managing Fear
A good article on this topic is, Managing Fear by Gerald Suarez (who I worked with for several years). There are also 3 videos on this topic by Dr. Suarez, available from Management Wisdom, the producers of the Deming Library videos. I must admit I didn’t really understand the effects of fear and anxiety on performance until hearing Dr. Suarez speak on the topic many years ago. continue reading: Managing Fear - Fast Company Interview: Jeff Immelt
My guess would be that what lead to this quote is not a lack of understanding that managers need the same qualities today they needed 10 years ago but the compulsion to feed the media frenzy for some incredible new insight. It just isn’t sexy to say “we need the same leadership qualities we needed in the past.” Deming stressed the importance of these “new” qualities he states more than 50 years ago and I think most decent managers have know you need to “know why we’re doing them”
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Customer focus and innovation would also be at the top of the list of important issues and were 10 years ago and will be 20 years from now. What is important for management does not change much.
occasionally innovation is so dramatic it drastically changes the practice of management, two examples:
1) the use of information technology
2) the whole quality movement [Deming’s ideas, SPC, Toyota/Lean, Six Sigma… continue reading: Fast Company Interview: Jeff Immelt - Management is Prediction
I believe Deming’s thoughts about prediction are most effectively put into action using the PDSA cycle. Specifically, you must predict the results in the planning phase (prior to piloting improvements). I find that this is rarely done. I don’t think the form of that prediction is critical (narrative with loose numerical guesses, precise numerical prediction…). The critical issue is making the prediction, then comparing the results to that prediction and then figuring out how your original understanding can be improved based on the new data.
Learning will not only be about the specific case being examined, but also, over time, learning about your tendencies in prediction. continue reading: Management is Prediction - Deming’s Ideas at Markey’s Audio Visual
Mark Miller, General Manager, Markey’s Audio Visual spoke on Markey’s experience adopting Deming’s ideas.
- Markey’s needs to anticipate the changing needs of customers and anticipate those needs
- Unknown and unknowable – not really unknown just un-measurable (again taught to all employees)
- Gemba – where the real work gets done (the customer interaction – he stressed time and again that the key to their success was Markey’s employees interaction with customers – Markey’s aims to provide the best customer experience the customer has with any company)
- Break down barriers between departments – Markeys doesn’t charge internally. Indianapolis looses money – they own the high end equipment used by the other offices.
- Intrinsic motivation v. Extrinsic motivation – he has the chart from page 122 of New Economics in Deming’s handwriting on his wall.
continue reading: Deming’s Ideas at Markey’s Audio Visual
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