The Deming Chain Reaction

The so-called Deming Chain Reaction was actually borrowed from a model that Walter Shewhart developed.  He probably borrowed the idea from another thinker.  Basically the idea was for management to move away from thinking about quality as a desirable outcome, to thinking about quality as a competitive strategy.

Competitive strategy as a concept has been around for centuries.  A person selling an item similar to that sold by another can compete on price, by selling it for less money.  Perhaps the seller may try to compete by adding extras, gift-wrapping, for example.  Technical companies compete by being technology leaders and being on the cutting edge of new developments.  There are no end to methods to compete.  But some methods are more effective in the long run than others.

It is not a mistake that Deming’s first published book on the subject was entitled “On Quality, Productivity and Competitive Position”.  In the book, he sets forth the reasons why emphasis on quality leads to productivity improvement and how that is a very effective competitive strategy in the long run.  Phil Crosby in the early 80s in his book, “Quality is Free” pointed out that improving quality lowered cost.  But Deming had shown this to the Japanese  30 years earlier.  And, Deming pointed out the benefits of developing a competitive strategy based on quality.

One of the problems in talking about quality is that many people have pre-conceived notions of quality is.  For some it is meeting specifications.  Joseph Juran defines it as ‘meeting customer requirements’.  Zero Defects was Crosby’s nostrum, but is really just another way of saying quality is meeting specfications.

Deming’s ideas are much broader than that and are, perhaps, best captured with the phrase ‘continual improvement’.  This term connotes the ongoing nature of the strategy.  According to Deming, quality is not a state to be achieved in manufacturing, but is, rather, an ongoing company-wide effort at continual improvement.  What Bill Conway called “the process – the way everyone thinks, talks, works and acts every day.”

Whether or not this is a successful strategy is, in my opinion, not arguable.  One has only to look at the automobile industry for clear proof.  After all the nonsense is stripped away, the fact is that Japanese automakers (Toyota, Honda and Nissan) make better cars than American automakers (GM, Ford and Chrysler) and have done now for years.  Buyers are not idiots.  They understand value, and and realize that better quality at the same or lower cost is excellent value.  End of story.

But the implications of the story are not just confined to the auto industry.  Cameras, computers, appliances, power tools, earthmoving equipment, and more have fallen from America’s basic manufacturing industries to a legacy of plant closings, job losses and dwindling revenues and profits.

Deming’s re-write of his first book on competitiveness was called “Out of the Crisis”.  What crisis one may ask?

This one.