Saturday, June 18, 2011

Dr. W. Edwards Deming, Quality System Managment, and the Global Auto Industry

Dr. W. Edwards Deming-
one man who changed the world
Few are familiar with the history that led to the problems and decline of the American Automobile Industry and the success and growth of the Japanese Automobile Industry. It is a tale of correct decisions versus disastrous decisions. It is a tale about looking at the long term solutions and looking at the short term solutions. It is the tale of a single American, Dr W.Edwards Deming, and his convincing, creation, and implementation of a Quality Management System that is now a global standard of quality across many industries, and is currently named ISO 9001 by the International Standards Organization.

Step back into the 1950's. America controls the car industry and all is well and profitable in America. At the same time some Japanese imports, not cars, but knickknacks, dodads, widgets, and plastic based minutia entering the country were, to say the least, junk which broke as soon as you picked it up. The big laugh in America was that "made in Japan" meant poor quality junk.



Dr. W. Edwards Deming (October 14, 1900 – December 20, 1993) was an American statistician, professor, author, lecturer, and consultant. He is perhaps best known for his 1950's work in Japan. He went to the American cars companies and presented to them his QSM approach to improving quality of manufactured items. The American car executives laughed in his faced saying we own the car industry and we don't see a need of such a process in manufacturing. Deming could not convince American car makers of the advantages of his QSM (Quality System Management).

Deming looked around and said maybe Japan would be interested. They have manufacturing methods that need to be reformed and improved. They know they are in trouble and need help. They accepted Deming's ideas. Deming, an American, who is considered the single most influential industrialist individual, Japanese or non-Japanese, in the history of Japan. Among the Japanese they speak of him as if he was a god. What did he do?

He taught and worked years in Japan improving and refining the QSM procedures until Japan became a juggernaut of high quality production. The lessons the Japanese learned from Deming changed their entire world into the highest quality car manufacturers in the world. It placed Japan in the position to replace American car manufacturers dominance in their own American market. Japan outsells American car manufacturers in America and their products are held as an example of the best quality possible. If it weren't for the deep hatred the Chinese have for the Japanese, from Rape of Nan-King, etc., America would not be the leading automobile manufacturer in China. American companies now sell more cars in China then in the USA.

So how did this happen?
  • American car manufactures in the 1950's thought they owned the industry. They also felt that no one especially Japan was going to be able to compete in their markets. This disastrous decision land the groundwork for America to be surpassed in quality and sales in future years. American were building the same way they had always, a lower quality, but now someone was building cars better, and a higher quality. Americans always want the best quality. There was some buyer hesitation after WWII, but Americans started purchasing Japanese cars, and the rest is history. Years later Americans were playing quality catch up to Japanese quality because they ignored QSM and Deming.
  • Deming was the man with a plan. The QSM procedures are very precise, exact, with numerous points of quality verification. In a nutshell, any manufacturing process step which modifies or adds components to the product must have a complete inspection verifying the product before and after the modification, verifying the component before and after the modification. If there is anything that does not pass these inspections, it is removed from the line and the product is NOT the quality we want. Now these inspections, especially in a car with lots of components is costly, but the end product is always the highest quality. Deming's QSM is applicable to any manufacturing industry. It's biggest benefit is that poor quality or mistakes are identified at the earliest point in the manufacturing process. An inspection point that fails a lot of inspections must be fixed and corrected so the failures are eliminated from the manufacturing process
  • An interesting famous anecdotal story about quality. Americans purchase some large amount of widgets from the Japanese, In the contract negotiations The Americans said they would at most accept 5% mistakes or failed widgets out of the whole lot. The Japanese made the order and returned to the Americans for the inspection of the order. The Americans checked the quality and found 100% perfection in the pieces delivered. Great they said. The Japanese representative was standing there holding a bag of widgets. Americans said what is that for? The Japanese representative said these are the 5% mistakes you requested.