Trade offs between Quality and Price: Deming’s Clarification

Americans simply have no idea of what quality is. Ask almost any plant manager in this country and he will say it is a trade off, that you have one or the other. He does not know that you can have both, and that once you have quality, then you can have productivity, lower costs, and a better market position. Here, people don’t know this, but they know it in Japan. In 1950 in Japan, Dr.Deming was able to get top management together for conferences to explain what they had to do. No such gathering has ever been held in America and no idea if anybody has any way of organizing one. In Japan, Mr Ishikawa of JUSE organized conferences with top management in July 1950, again in August, then six months later, and so on. Top management understood from the beginning what they must do, and that as they improved quality, productivity would increase. They had some examples within six months, and more within a year. News of these examples spread throughout the country, and everyone learned about them because Japanese management was careful to disseminate the information.

The supposition of so many Americans that better quality means more gold plating or polishing, more time spent to do better work, is just not true. Quality improvement means improving the process so it produces quality without rework, quickly and directly. In other words, quality means making it right the first time so you don’t have to rework it. By improving the process, you decrease wasted human effort, wasted machine time and materials, and you get a better product. If you decrease rework by six percent, you increase the productivity of a production line by six percent, and increase its capacity by the same amount. Therefore, in many cases, increased capacity could be achieved in this country simply by reducing wasted human efforts, machine time, and materials. In this country, better use of existing machinery – not machinery or automation is the answer.

New machinery and automation very often bring higher costs, not lower ones. They also bring headaches and troubles which a company is unprepared to handle. The result is that they decreases production, increase costs, lower quality, and create problems the company never had before. The best thing to do is learn to use what you have efficiently. Once you learn that, then there’s a possibility you may learn to use more sophisticated equipment.

In Japan, now that they are using present equipment successfully and efficiently and cannot extract any more capacity, the only way to increase production is with new automated machinery, because there are no more people to employ. There are no employment agencies in Japan where you can find people to work in plants. In the United States, on the other hand, there are seven million unemployed, may be half of whom are actually able and willing to work, and are good workers.

Back in the 1950s, you made a prophetic statement when you told the Japanese that if they pursued this quality first approach. Japan would dominate the world market and everyone, including the United States would demand protection from Japanese imports. It appears American industries were not pursuing the proper course of action in this field.

Dr.Deming saw through the conferences with the top management in Japan that Japan could do a better job with quality control than America had ever done. Americans had not done well with quality control because they thought of it as a bag of techniques. As a group, management in America never knew anything about quality control. What you had in America, from the intensive statistical courses started at Stanford University, were brilliant fires and applications all over the country. But when a person changed jobs, the fire burned out and there was nobody in management to keep it going.