All entries for Sunday 23 November 2008

November 23, 2008

Deming and the learning organisation

One thing you notice about Deming is that his style of writing is very different. Sometimes he would write a short sentence that would just turn what you used to believe up side down. I would like to share my thoughts on one of Deming's greatest contribution to management thinking ('greatest' according to Delavigne 1994 ...)

"Every system has variation: hence, the information needed to create optimum systems is unknown and unknowable." (Deming's quote adapted from Delavigne 1994; pp47)

When we read something as abstract as that, it is worthwhile thinking about what it means exactly...

Why is it unknown?

Because all systems contains variation, no matter how sophisticated the system is, sources of variation will always exist and that prevent us from producing an outcome that is exactly identical with the last outcome.

(Hmm... fair comment? maybe for actions controlled by man we can expect significant amount of variation. But with learning and practice this variation can be reduced significantly. Further the advances in machinery and automation has given much greater precision to production process and outcome which makes this comment less convincing then it was before recent technological advances took place)

So all we can possibly do, in a system under statistical control, is to change the system somehow so the range of variationis reduced, albeit never truyly eliminated.

Why is it unknowable?

The optimum system is a goal by which we gear all our effort to achieve. We do not know how to get there nor do we know it when we get there. All we essentially know, is that we need to constantly improve our system if we want to become closer to this goal.

This creates a need for a learning orgnisation since a learning organisation by definition is:

"the process of improving actions through better knowledge and understanding" (Fiol, C.M 1985; adapted from CBE Group 1 presentation)

THERE! I established the link between Deming and the learning organisation XD Hope you find this useful ...


Cost of bad quality

Deming's 14 points of management seems to be designed to improve the quality of product or services in the modern industry, obvious enough. But I think it's worthwhile to relate his philosophies to the real world and think whether they will really work.

In the #4 point "End of the practice of awarding businesses on the basis of price tag alone", he writes "Price has no meaning without a measure if the quality being purchased. Without adequate measures of quality, business drifts to the lowest bidder, low quality and high cost being the inevitable result" Out of the crisis p32. As I read this, I am just thinking how crucial is quality in our purchasing decisions, and compare that to the cost of the product/service we are buying. I believe both are very important but very often we consider cost before quality.

Some cynics would simply says 'this is the way the world works, people go where they can get the best deals'. True, and many businesses have operated and suceeded based on this mentality. But  I suppose the point Deming is getting at is that too much has been placed on the price tag. And that we would go to supermarket to buy the cheapest milk, call our family on the cheapest network.What we often do no realise is the trouble we end up getting into. It may well be the milk we buy was not processed properly and we end up in hospital, or the network we use never connects and we are stuck in a 12 month contract. Either case our decisions have costed us much more than what we initially anticipated. A hard lesson learned?

Perhaps instead of blaming ourselves for being cheap or the sneaky vendors for their deceit, we can ask oursleves whether our behaviors have helped to bring about this consequence. In Deming's words " The price tag is still too easy to read, but an understanding of quality requires education" p33.  Is the customer to blame? Perhaps not, it is the businesses themselves who need to communicate product superiority and charge a fair tariff. Moreoever, we ourselves needs to be more educated to understand quality is not just something that businesses has to achieve, moreover it is something we have to support and believe.


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