What are Dr.

Demings 14
Points?

1. Constancy of purpose
Create constancy of purpose for continual improvement of products and service to society,
allocating resources to provide for long range needs rather than only short term profitability, with
a plan to become competitive, to stay in business, and to provide jobs.

2. The new philosophy

Adopt the new philosophy. We are in a new economic age, created in Japan. We can no longer
live with commonly accepted levels of delays, mistakes, defective materials, and defective
workmanship. Transformation of Western management style is necessary to halt the continued
decline of business and industry.

3. Cease dependence on mass inspection

Eliminate the need for mass inspection as the way of life to achieve quality by building quality into
the product in the first place. Require statistical evidence of built in quality in both manufacturing
and purchasing functions.

4. End lowest tender contracts

End the practice of awarding business solely on the basis of price tag. Instead require meaningful
measures of quality along with price. Reduce the number of suppliers for the same item by
eliminating those that do not qualify with statistical and other evidence of quality. The aim is to
minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by
moving toward a single supplier for any one item, on a long term relationship of loyalty and trust.
Purchasing managers have a new job, and must learn it.

5. Improve every process

Improve constantly and forever every process for planning, production, and service. Search
continually for problems in order to improve every activity in the company, to improve quality and
productivity, and thus to constantly decrease costs. Institute innovation and constant
improvement of product, service, and process. It is management's job to work continually on the
system (design, incoming materials, maintenance, improvement of machines, supervision,
training, retraining).

6. Institute training on the job

Institute modern methods of training on the job for all, including management, to make better use
of every employee. New skills are required to keep up with changes in materials, methods,
product and service design, machinery, techniques, and service.

7. Institute leadership
Adopt and institute leadership aimed at helping people do a better job. The responsibility of
managers and supervisors must be changed from sheer numbers to quality. Improvement of
quality will automatically improve productivity. Management must ensure that immediate action is
taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational
definitions, and all conditions detrimental to quality.

8. Drive out fear

Encourage effective two way communication and other means to drive out fear throughout the
organization so that everybody may work effectively and more productively for the company.

9. Break down barriers

Break down barriers between departments and staff areas. People in different areas, such as
Leasing, Maintenance, Administration, must work in teams to tackle problems that may be
encountered with products or service.

10. Eliminate exhortations

Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero
Defects and new levels of productivity, without providing methods. Such exhortations only create
adversarial relationships; the bulk of the causes of low quality and low productivity belong to the
system, and thus lie beyond the power of the work force.

11. Eliminate arbitrary numerical targets

Eliminate work standards that prescribe quotas for the work force and numerical goals for people
in management. Substitute aids and helpful leadership in order to achieve continual improvement
of quality and productivity

12. Permit pride of workmanship

Remove the barriers that rob hourly workers, and people in management, of their right to pride of
workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of
performance) and of Management by Objective. Again, the responsibility of managers,
supervisors, foremen must be changed from sheer numbers to quality.

13. Encourage education

Institute a vigorous program of education, and encourage self improvement for everyone. What
an organization needs is not just good people; it needs people that are improving with education.
Advances in competitive position will have their roots in knowledge.
14. Top management commitment and action
Clearly define top management's permanent commitment to ever improving quality and
productivity, and their obligation to implement all of these principles. Indeed, it is not enough that
top management commit themselves for life to quality and productivity. They must know what it is
that they are committed to—that is, what they must do. Create a structure in top management
that will push every day on the preceding 13 Points, and take action in order to accomplish the
transformation. Support is not enough: action is required!

DEMING'S 14 PRINCIPLES
PRINCIPLE 1 : "Create a constancy of purpose"
Define the problems of today and the future
Allocate resources for long-term planning
Allocate resources for research and education
Constantly improve design of product and service
PRINCIPLE 2 : "Adopt the new philosophy"
Quality costs less not more
Superstitious learning
The call for major change
Stop looking at your competition and look at your customer instead
PRINCIPLE 3 : "Cease dependence on inspection"
Quality does not come from inspection
Mass inspection is unreliable, costly, and ineffective
Inspectors fail to agree with each other
Inspection should be used to collect data for process control
PRINCIPLE 4 : "Do not award business basedon price tag alone"
Price alone has no meaning
Change focus from lowest initial cost to lowest total cost
Work toward a single source and long term relationship
Establish a mutual confidence and aid between purchaser and vendor
PRINCIPLE 5 : "Improve constantly the system of production and service"
Quality starts with the intent of management
Teamwork in design is fundamental
Forever, continue to reduce waste and continue to improve
Putting out fires is not improvement of the process
PRINCIPLE 6 : "Institute training"
Management must provide the setting where workers can be successful
Management must remove the inhibitors to good work
Management needs an appreciation of variation
This is management's new role.
PRINCIPLE 7: "Adopt and institute leadership"
MBO's
Work standards
Meet specifications
Zero defects
Appraisal of performance
Replace with leadership
Leaders must:
Remove barriers to pride of workmanship
Know the work they supervise
Know the difference between special and common cause of variation
 Principle 8 : "Drive out fear"
The common denominator of fear
The fear of knowledge
Performance appraisals
Management by fear or numbers
PRINCIPLE 9 : "Break barriers among staff areas"
Know your internal suppliers and customers
Promote team work
PRINCIPLE 10 : "Eliminate slogans, exhortations,and targets
They are directed at the wrong group
They generate frustration and resentment
Use posters that explain what management is doing to improve the work environment
PRINCIPLE 11 :"Eliminate numerical quotas"
They impede quality
They reduce production
A person's job becomes meeting a quota
PRINCIPLE 12 : "Remove barriers"
Performance appraisal systems
Production rates
Financial management systems
Allow people to take pride in their workmanship
PRINCIPLE 13 :"Institute a program of education and self-improvement"
Commitment to lifelong employment
Overtime and education
Work with higher education of needs
Develop team building skills in children
PRINCIPLE 14 : "Take action to accomplish thetransformation"
Management must:
Struggle over the fourteen points
Take pride in the new philosophy
Include the critical mass of people in the change
Learn and use the Shewhart cycle

Tuesday, January 19th, 2010

The 14 Points
1. Create a constant purpose toward improvement.
• Plan for quality in the long term.
• Resist reacting with short-term solutions.
• Don't just do the same things better – find better things to do.
• Predict and prepare for future challenges, and always have the
goal of getting better.
2. Adopt the new philosophy.
• Embrace quality throughout the organization.
• Put your customers' needs first, rather than react to competitive
pressure – and design products and services to meet those needs.
• Be prepared for a major change in the way business is done. It's
about leading, not simply managing.
• Create your quality vision, and implement it.
3. Stop depending on inspections.
• Inspections are costly and unreliable – and they don't improve
quality, they merely find a lack of quality.
• Build quality into the process from start to finish.
• Don't just find what you did wrong – eliminate the "wrongs"
altogether.
• Use statistical control methods – not physical inspections alone –
to prove that the process is working.
4. Use a single supplier for any one item.
• Quality relies on consistency – the less variation you have in the
input, the less variation you'll have in the output.
• Look at suppliers as your partners in quality. Encourage them to
spend time improving their own quality – they shouldn't compete for
your business based on price alone.
• Analyze the total cost to you, not just the initial cost of the product.
• Use quality statistics to ensure that suppliers meet your quality
standards.
5. Improve constantly and forever.
• Continuously improve your systems and processes. Deming
promoted the Plan-Do-Check-Act approach to process analysis and
improvement.
• Emphasize training and education so everyone can do their jobs
better.
• Use kaizen as a model to reduce waste and to improve
productivity, effectiveness, and safety.
6. Use training on the job.
• Train for consistency to help reduce variation.
• Build a foundation of common knowledge.
 • Allow workers to understand their roles in the "big picture."
• Encourage staff to learn from one another, and provide a culture
and environment for effective teamwork.
7. Implement leadership.
• Expect your supervisors and managers to understand their
workers and the processes they use.
• Don't simply supervise – provide support and resources so that
each staff member can do his or her best. Be a coach instead of a
policeman.
• Figure out what each person actually needs to do his or her best.
• Emphasize the importance of participative management and
transformational leadership.
• Find ways to reach full potential, and don't just focus on meeting
targets and quotas.
8. Eliminate fear.
• Allow people to perform at their best by ensuring that they're not
afraid to express ideas or concerns.
• Let everyone know that the goal is to achieve high quality by
doing more things right – and that you're not interested in blaming
people when mistakes happen.
• Make workers feel valued, and encourage them to look for better
ways to do things.
• Ensure that your leaders are approachable and that they work
with teams to act in the company's best interests.
• Use open and honest communication to remove fear from the
organization.
9. Break down barriers between departments.
• Build the "internal customer" concept – recognize that each
department or function serves other departments that use their
output.
• Build a shared vision.
• Use cross-functional teamwork to build understanding and reduce
adversarial relationships.
• Focus on collaboration and consensus instead of compromise.
10. Get rid of unclear slogans.
• Let people know exactly what you want – don't make them guess.
"Excellence in service" is short and memorable, but what does it
mean? How is it achieved? The message is clearer in a slogan like
"You can do better if you try."
• Don't let words and nice-sounding phrases replace effective
leadership. Outline your expectations, and then praise people face-
to-face for doing good work.
 11. Eliminate management by objectives.
• Look at how the process is carried out, not just numerical targets.
Deming said that production targets encourage high output and low
quality.
• Provide support and resources so that production levels and
quality are high and achievable.
• Measure the process rather than the people behind the process.

Tip:
There are situations in which approaches like Management By Objectives are
appropriate, for example, in motivating sales-people. As Deming points out, however,
there are many situations where a focus on objectives can lead people to cut corners
with quality. You'll need to decide for yourself whether or not to use these approaches. If
you do, make sure that you think through the behaviors that your objectives will
motivate.

12. Remove barriers to pride of workmanship.

• Allow everyone to take pride in their work without being rated or
compared.
• Treat workers the same, and don't make them compete with other
workers for monetary or other rewards. Over time, the quality system
will naturally raise the level of everyone's work to an equally high
level.
13. Implement education and self-improvement.
• Improve the current skills of workers.
• Encourage people to learn new skills to prepare for future
changes and challenges.
• Build skills to make your workforce more adaptable to change,
and better able to find and achieve improvements.
14. Make "transformation" everyone's job.
• Improve your overall organization by having each person take a
step toward quality.
• Analyze each small step, and understand how it fits into the larger
picture.
• Use effective change management principles to introduce the new
philosophy and ideas in Deming's 14 points.

How an organization can do strategic quality planning?

The process starts with the principles that quality and customer satisfaction are the center
of an organization’s future. It brings together all the key stakeholders.
The strategic planning can be performed by any organization. It can be highly effective,
allowing the organizations to do the right thing at the right time, every time.

There are seven steps to strategic Quality Planning:

1. Discover customer needs

2. Customer positioning
3. Predict the future
4. Gap analysis
5. Closing the gap
6. Alignment
7. Implementation

1. Customer Needs: The first step is to discover the future needs of the customers. Who
will they be? Will your customer base change? What will they want? How will they
want? How will the organization meet and exceed expectations?

2. Customer Positioning: Next, the planners determine where organization wants to be

in relation to the customers. Do they want to retain, reduce, or expand the customer base.
Product or services with poor quality performance should be targeted for breakthrough or
eliminated. The organization’s needs to concentrate its efforts on areas of excellence.

3. Predict the future: Next planners must look into their crystal balls to predict the
future conditions that will affect their product or service. Demographics, economics
forecasts, and technical assessments or projections are tools that help predict the future.
4. Gap Analysis : This step requires the planner to identify the gaps between the current
state and the future state of the organization. An analysis of the core values and concepts
is an excellent technique for pinpointing gaps.

5. Closing the Gap: The plan can now be developed to close the gap by establishing
goals and responsibilities. All stakeholders should be included in the development of the
plan.

6. Alignment: As the plan is developed, it must be aligned with the mission, vision, and
core values and concepts of the organization. Without this alignment, the plan will have
little chance of success.

7. Implementation: This last step is frequently the most difficult. Resources must be
allocated to collecting data, designing changes, and overcoming resistance to change.
Also part of this step is the monitoring activity to ensure that progress is being made. The
planning group should meet at least once a year to assess progress and take any corrective
action.
Principles Of TQM

1- Be Customer focused:

whatever you do for quality improvement, remember that ONLY

customers determine the level of quality, whatever you do to foster

quality improvement, training employees, integrating quality into

processes management, ONLY customers determine whether your

efforts were worthwhile.

2-Insure Total Employee Involvement:

This done after you remove fear from work place, then empower

employee ... you provide the proper environment.

3- Process Centered:
Fundamental part of TQM is to focus on Process thinking.

4- Integrated system:

All employee must know business mission and vision, must monitor

the process. An integrated business system may be modeled by

MBNQA or ISO 9000.

5- Strategic and systematic approach:

Strategic plan must integrate quality as core component.

6- Continual Improvement:

Using analytical and creative thinking in finding ways to become more

effective.

7- Fact Based Decision Making:

Decision making must be ONLY on data, not personal thinking or

situational.

8- Communication :

Communication strategy, method and timeliness must be well defined.

CUSTOMER SATISFACTION
Customers are important asset to the organization, satisfied customers will buy
more, and buy more frequently, and pay their bill promptly.
In a manufacturing and service organization, customer satisfaction is considered
as a measure of quality.TQM implies an organizational drive with meeting or
exceeding customer needs.Understanding the customer's needs and expectations
is essential to winning new business. To attain this level, the organization should
examine their quality system to respond to their ever changing customer's needs.

A simple definition of customer satisfaction is illustrated below

Teboul model
Characteristics of customer satisfaction.
1. it is far from simple.
2. it is not an objective statistic, but more of feeling and attitude.
3. therefore like people's opinion and feeling, it is subjective by nature.
4. because of this subjective nature, it is difficult to measure.
5. the measurement of customer satisfaction is not precise.
6. the customer satisfaction should not be viewed in vacuum, i.e., it should be
compared with the level of satisfaction they have with competitor's product are
service.

Types of customers.

1. Internal customers - each of them receives a product or service and in

exchange, providers a product or service.
2. external customers - one who uses the product or service, the one who
purchase the product, or the who influences the sale of theproduct.
One basic concept of TQM is focus on customers, both internal and external.

Customer perception of quality.

In an orgabnization there is no acceptable quality level because the customer's

needs, values and expectations are constantly changing and becoming more
demanding.
An American Society for Quality (ASQ) survey reveals the following end-user
perception of quality
1.Performance
2.Features
3.Service
4. Warranty
5. Price
6. Reputation.

Price.
today customers are ready to pay a higher price to obtain value. Therefore it
becomes increasingly important for an organization to identify, verify, and
update each customer's perception of value against those of its com[petitors.
( for other perceptions please refer unit - 1 notes)

CUSTOMER COMPLAINTS

Unlike the customer's feedback the customer complaints are reactive, and they
are important in gaining data on customer perceptions.
A disatisfied customer can easily become a lost customer because of their
frustrations.This customer dissatisfaction become a measure for organizational
process improvement measures.

Every single complaint should be accepted, analyzed, and acted upon to again
win over customer's confidence.Since more than 50% of the dissatisfied
customers will buy again if they are complaint has been heard and resolved. By
adopting a positive approach the complaints can be seen as an oppurtunity to
obtain information and provide a positve service to the customer.

Handling the customer complaints

1. investigaste customer's experiences by actively receiving the customer feedback

and then acting promptly.
2. develop procedures for complaint resolution that include empowering front-
line employee.
3. analyze complaints, try to put them in a category for speedy response.
4. Work to identify process and materuial variations and then eliminaste the root
cause.'more inspection' is not a corrective action.
5. Afetr receiving the response, a senior manager should contact the customer
and strive top resolve the concern
6. Establish customer satsfaction measures and constantly monitor them
7. Communicate complaint information, as well as the results of all inquiries and
solutions, to all people in the organization.
8. provide a monthly complaint report to the quality council for their evalution
and if needed, the assignment of process im[provement teams.
9. identify customer's expectations in advance rather than afterward through
complaint analysis.

SERVICE QUALITY

Customer service is the set of activities an orgaqnization uses to win and retain
customers' satisfaction. it can be provided before, during, and after the sale fo the
product.
Elements of customer service are:

Organization
1. identify each market segment
2.write down the requirements
3.communicate the requirements
4.organise processes
5.organize the physical spaces

Customer care

6. meet the customer's expectations

7. get the customer point of view
8. deliver what is promised
9. make the customer feel valued
10.respond to all complaints
11.over respond to the customer.
12.provide a clean and comfortable customer reception environment.

Communication

13. optimize the trade fo between time and personal attention

14. minimize the number of contact points.
15 provide pleasant, knoweledgble, and enthusiastic employees.
16. write documents in customer friendly language.

front-line people

17. hire people who like people

18. challenge them to develop better methods.
19. give them a authority to solve problems
20. serve them as internal customers
21. be sure they are adequetly trained.
22. recognize and reward performance.

Leadership

23. lead by example

24. listen to the front line employee
25. strive for continuous process improvement.

CUSTOMER RETENTION

Customer retention represents the activities that produces the necessary

customer satisfaction which in turn creates the customer loyalty.
customer retention moves customer satisfaction to the next level by determining
what is truly important to the customers and making sure that the customer
satisfaction system focuses valuble resources on things that are important to the
customer. Customer rettention is the connection between customer satisfaction
and the bottom line.
World-class companies knoe that continuous improvement and customer
satisfaction should go hand-in-hand.

Improved service to the customer is a costlier affair, so an organization must

determine its return on the service invesment. For this the important service
elements that significantly improve revenues and market share shuld be
determined.

One survey indicates, it requires five times of effort to win a new customer than
retaining a present customer. In this context customer retention is important for
organizational sucess.

EMPLOYEE INVOLVEMENT

Japanese management emphasizes the need to consider employee as a valuble

resources rather than treating them as a mere tools for production.
Employee involvement is one approach to improve quality and productivity. It is
not an replacement for management nor is it the final word in quality
improvement, it aims at better meeting of organizational goals at all levels.

Motivation

Knowledge fo motivation helps us to understand the utilization fo employee

involvement to achieve process improvement.

THEORIES OF MOTIVATION

He explained the motivation interms of a heirarchy of needs and that there were
five levels.
These are survival, security, social, esteem, and self-actualization.
( refer the above figure)

It is important to note that as employees move up the heirarchy, they will

immedietly revert back to the previous level if they feel threatned.

HERZBERG'S TWO FACTOR THEORY

Herzberg extends the Maslow's theory by using empirical research oin employee
motivation.

He found that people were motivated by the motivators ( intrinsic factors) like
recognition, responsibility, achievement, advancement and the work itself.
In addition he found that bad feelings were associated with preventable
dissatisfiers or hygiene factors (extrinsic factors) like low salary, minimal fringe
benefits, poor working conditions, ill-defined organizational policies and
mediocre(ordinary) supervision.

He also explained that the presence of extrinsic factors( for example good
working condition) does not produce any motivation but their absence will create
dissatifaction among employees.
In a same manner the absence of intrinsic factors ( for example advancement)
does not produce any dissatisfaction but their presence will provide strong level
of motivation.
Mcgregor's Theory X and Theory Y

How to motivate work force

1. Know thyself
2. Know your employees
3. Establish a positive attitude
4. Share the goals
5. Monitor progress
6. Develop intersting work
7. Communicate
8. Celebrate sucess

EMPOWERMENT

The dictionary meaning of the term empowerment is to invest people with

authority.Its purpose is to tap the enourmous potential that lies within every
worker.

An operational definition is as follows:

Empowerment is an environment in which people have the ability, the

confidence, and the commitment to take the responsibility and ownership to
improve the process and initiate the necessary steps to satisfy customer
requirements within well defined boundaries in order to achieve organizational
values and goals.

Empowerment is nothing unusual, people generally want to be more in charge of

their own jobs and carrers. afterall, they do that sucessfully in their personal lives
every day. Most people appreciate and value the trust and respopnsibility.This
empowerment helps greatly in eliminating resistence to changes.

Empowerment is different from delegation or job enrichment, which means

distributing or entrusting work to others.In empowerment employee is held
responsible for accomplishing a whole task.i.e., employee becomes process
owner, thus not only responsible but also accountable.

Three conditions are necessary for empowering employees

1. Everyone must understand the need for change

2. The system needs to change to the new paradigm( model/standard)
3. The organization must enable its employees.

TEAMS

Teams are very effective in solving all quality and productivity problems.

Team is defined as a group of peopleworking together to achieve common

objectives or goals.
Teamwork is the cumulative actions of the team during which each member of
the team subordinates his interests and opinions to fulfill the objectives or goals
of the group.
Many heads are better than one, especially in meeting ever-changing customer
needs.
Each member of the team have special ability that can be used for the
problem.Many processes are so complex that one person cannot able solve
completely.
Based on the synergic effect, whole is greater than sum of its parts.Team work is
better than sum of its member contribution.
Team builds a rapport with each other that allows everyone to do a better job.
Teams provide the vehicle for improved communication.

Types of teams

· Process improvement teams

· cross-functional teams
· natural work teams
· self-directed/ self managed teams

Characteristics of successful teams

Sponsor
Team charter
Team competition
training
groud rules
clear objectives
accountability
well-defined decision procedures
resources
trust
effective problem solving
open communication
appropriate leadership
balanced participation
cohesiveness.

3. Maslow's Pyramid Of Basic Human Needs.

1. Physiological Needs : Physiological needs are the basic needs for sustaining
human life. These needs include food, shelter, clothing, rest, air, water, sleep and
sexual satisfaction. These basic human needs (also called biological needs) lie at the
lowest level in the hierarchy of needs as they have priority over all other needs.
These needs cannot be postponed for long. Unless and until these basic
physiological needs are satisfied to the required extent, other needs do not motivate
an employee. A hungry person, for example, is just not in a position to think of
anything else except his hunger or food. According to Maslow, 'man lives by bread
alone,' when there is no bread. The management attempts to meet such physiological
needs through fair wages.
2. Security or Safety Needs : These are the needs connected with the
psychological fear of loss of job, property, natural calamities or hazards, etc. An
employee wants protection from such types of fear. He prefers adequate safety or
security in this regard i.e. protection from physical danger, security of job, pension for
old age, insurance cover for life, etc. The safety needs come after meeting the
physiological needs. Such physiological needs lose their motivational potential when
they are satisfied. As a result, safety needs replace them. They begin to manifest
themselves and dominate human behavior. Safety needs act as motivational forces
only if they are unsatisfied.
3. Social Needs : An employee is a human being is rightly treated as a social
animal. He desires to stay in group. He feels that he should belong to one or the other
group and the member of the group should accept him with love and affection. Every
person desires to be affiliated to such groups. This is treated as basic social need of
an individual. He also feels that he should be loved by the other members. He needs
friends and interaction with his friends and superiors of the group such as fellow
employees or superiors. Social needs occupy third position in the hierarchy of needs.
4. Esteem Needs : This category of needs include the need to be respected by
others, need to be appreciated by others, need to have power and finally prestigious
position. Once the previous needs are satisfied, a person feels to be held in esteem
both by himself and also by others. Thus, esteem needs are two fold in nature. Self
esteem needs include those for self confidence, self-respect, competence, etc. The
second groups of esteem needs are those related to one's status, reputation,
recognition and appreciation by others. This is a type of personal ego which needs to
be satisfied. The Organisation can satisfy this need (ego) by giving recognition to the
good work of employees. Esteem needs do not assume the motivational properties
unless the previous needs are satisfied.
5. Self-actualisation Needs : This is the highest among the needs in the hierarchy
of needs advocated by Maslow. Self actualisation is the desire to become what one is
capable of becoming. It is a 'growth' need. A worker must work efficiently if he is to be
ultimately happy. Here, a person feels that he should accomplish something in his
fife. He want5 to utilise his potentials to the maximum extent and desires to become
what one is capable of becoming. A person desires to have challenges and achieves
something special in his life or in the area of his specialization. Though every one is
capable of self-actualization, many do not reach this stage. This need is fully satisfied
rarely.