In the 1970s, Dr. Deming's philosophy was summarized by some of his Japanese proponents with the following 'a'-versus-'b' comparison:
(a) When people and organizations focus primarily on quality, defined by the following ratio,
quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
In 1993, Dr. Deming published his final book, The New Economics for Industry, Government, Education, which included the System of Profound Knowledge and the 14 Points for Management. It also contained educational concepts involving group-based teaching without grades, as well as management without individual merit or performance reviews.
The Deming System of Profound Knowledge
Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts:
Appreciation of a system: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services;
Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements;
Theory of knowledge: the concepts explaining knowledge and the limits of what can be known (see also: epistemology);
Knowledge of psychology: concepts of human nature.
The Appreciation of a system involves understanding how interactions (i.e., feedback) between the elements of a system can result in internal restrictions that force the system to behave as a single organism that automatically seeks a steady state. It is this steady state that determines the output of the system rather than the individual elements. Thus it is the structure of the organization rather than the employees, alone, which holds the key to improving the quality of output.
The Knowledge of variation involves understanding that everything measured consists of both "normal" variation due to the flexibility of the system and of "special causes" that create defects. Quality involves recognizing the difference to eliminate "special causes" while controlling normal variation. Deming taught that making changes in response to "normal" variation would only make the system perform worse. Understanding variation includes the mathematical certainty that variation will normally occur within six standard deviations of the mean.
The System of Profound Knowledge is the basis for application of Deming's famous 14 Points for Management, described below.
Key principles.Deming offered fourteen key principles to managers for transforming business effectiveness. The points were first presented in his book Out of the Crisis. (p. 23-24) Although Deming does not use the term in his book, it is credited with launching the Total Quality Management movement.Seven Deadly Diseases
In December 1993, W. Edwards Deming died in his sleep at the age of 93 in his Washington home at about 3 a.m. due to "natural causes." His family was by his side when he died.