Out Of Crisis


  Sarunas Abramavicius


                             OUT OF THE CRISIS 


     Summary


  In his first Chapter of the book  Out  of  the  Crisis,  W.  E.  Deming
presents short pre-history of total quality management and its meaning  for
the economics growth in Japan. It gives the reader an incentive to  come  to
the conclusion, that poor quality means high costs  and  vice  versa -  high
quality reduces the costs. It is given simplified scheme of  this  statement
along with many examples supporting it. But increase  in  quality  does  not
mean buying new  machinery  and  gadgets.  The  relating  statement  between
elucidating the idea of total quality management in the  first  Chapter  and
14 Points, which are the basis for transformation of American  industry,  in
the second Chapter, is cited below:
  If I were a banker, I would not lend money for new equipment unless  the
company that asked for the loan could demonstrate  by  statistical  evidence
that they are using their present equipment  to  reasonably  full  capacity,
and are at work on the 14 Points of Chapter 2 and  on  the  deadly  diseases
and obstacles of Chapter 3 .  (Ch.1.  pp.14)  So  improvement  in  quality,
which leads to improvement in productivity is not reached by new  machinery,
measurement of productivity, even statistical summarizing  itself.  What  is
to be done to  be  successful  in  the  market  is  given  in  Chapter  2  -
Principles for Transformation of Western Management. The purpose  of  this
chapter and of Chapter 3 is to explain the elements  of  the  transformation
that must take place. The transformation can only be accomplished  by  man,
not by hardware. A company  can  not  buy  its  way  into  quality.  (Ch.2.
pp.18). Every 14 Points is extended into 2 paragraphs which give a  lucidity
of authors mind. The 14 Points  stress  on  the  changing  of  the  way  of
thinking, adopting a  new  philosophy,  alteration  in  ones  psychological
attitude. A complex following of  the 14 Points should lead the  company  to
the top. The last point gives a plan of actions to be made in order  to  put
into practice the whole complex of principles.
  But this theory of management, as E.Deming  describes  his  14  Points,
cannot work without trying to eradicate so called diseases  and  obstacles
which   unfortunately  ,  [deadly   diseases]   stand   in   the   way   of
transformation and  ...afflict  most  companies  in  the  Western  World.
( Ch.3. pp.97 ) The writer of the book explains bad habits of every  manager
in almost every company. At the first sight nobody  even  could  think  that
emphasis on short-term profits or evaluation of performance  or  even  merit
rating could  be  fatal  for  the  companies.  Obstacles  are  presented  as
candidates for front rank in effectiveness,  along  with  deadly  diseases,
though  the most of them are easier  to  cure  than  the  deadly  diseases.
(Ch.3. pp.126)
  Those three chapters of Out of the crisis are the  core  of  the  book.
Logically  and  in  the  clearest  way  they  explain  what  total   quality
management is, what  its  purpose  and  the  meaning  is  not  only  in  the
economics, but in the everybodys life of any of the member of  any  society
in the world. I dare to call this book as a new philosophy school, of  which
the  leader  -  W.E.Deming  -  wishes  to  change  the  Western  management,
particularly to help out the American economics, but imperceptibly  intrudes
upon everyones consciousness trying to make upheaval in everyones  way  of
thinking.
  In the next two chapters E.Deming  predicts the period of time  that  has
to pass to improve total quality and gives some pieces  of  advice  to  help
the management to understand its responsibilities.
  The description and  explanation  of  the  quality,  relationships  among
quality, producer and consumer, heterogeneous meanings of  the  quality  are
given in the chapter 6 -  Quality and Consumer. One can  find  answers  to
the questions what quality and quality of  service  is,  what  consumer  and
what the triangle of interactions is, what one can learn from the consumer.
  Since Service industry plays huge role in economics, the  improvement  of
economics and the quality cannot do without the improvement of  the  quality
and productivity in service  organizations,  what  the  main  point  of  the
Chapter 7 is. All the areas of the  service  industry  are  touched  by  the
author, everywhere the attention is focused on the specific  items  in  each
particular sphere  of  the  service  industry.  An  abundance  of  realistic
examples shows the professionalism of the author and  his  understanding  of
the problems.
  ... The aim of the leadership should be to improve  the  performance  of
man and machine, to improve quality, to increase output, and  simultaneously
to bring pride of workmanship to people. Actually , most of  this  book   is
involved with leadership. (Ch 8. pp. 248) - It  is  stated  in  Chapter  8,
which expands the 7th Point of Deming. The leadership does not mean to  tell
what to do, but it is actually telling the people how to do, how to  improve
what has to be done, how to know how to do, how to evaluate by the means  of
statistical control. Some good examples are given . The charts  reflect  the
way of examining the problems and give the answer to many questions.
  Before even starting to improve the quality, everyone  has  to  meet  the
requirement to accept operational definitions. There is no any  way  out  in
improvement process without standards  and  regulations,  which  start  with
operational definitions. These and other important questions  are  discussed
in Chapter 9 and Chapter 10.
  The failure to understand the information in variation causes the central
problem in management and leadership. In Chapter 11 it is spoken  of  faults
of the system as common causes of trouble, and faults from  fleeting  events
as special  causes.  The  content  of  this  chapter  includes  the  deepest
analysis of  many  real  examples  taken  from  companies  and  proves  that
statistical control of the system using control charts  lets  discover  both
common and special causes.
   More examples of  improvement  Downstream  -  Chapter  12  is  like  a
continuation of Chapter 11. The next chapter provides  us  with  the  latent
danger of any new philosophy - some disappointments in  Great  Ideas.  Every
new theory has its advantages and disadvantages. Not everything in  the  new
philosophy is so good as it may seem from the  first  view.  But  as  it  is
said,    disappointments  arise  from  failure  to  understand  four  basic
axioms. (Ch. 13. pp. 388)
  Not only theoretical knowledge and examples from the real life are  given
in the book Out of the Crisis . E.W. Deming solves a  bunch  of  practical
problems from various spheres of industry, proving the  fairness,  clearness
and ability  to  apply  his  theoretical  reasonings.  The  bibliography  of
sources for advanced study is given as well in Chapter 15.
  How to organize the system in the company, how to reorganize the  present
system into the  system,  reaching  improvement  in  quality,  productivity,
minimizing of costs  is  discussed  in  Chapter  16.  Some  very  elementary
examples from the everydays life in Chapter17  -  Some  Illustrations  for
improvement of living  are presented  by the author.
  The Appendix refers to the whole of the book  Out of the Crisis  .  The
Japanese phenomenon demonstrates the world the importance of  total  quality
idea.  The whole world is familiar with the miracle  of  Japan,  and  knows
that the miracle started of with a  concussion  in   1950.  (...)  Suddenly,
Japanese quality and dependability turned upward in 1950  and  by  1954  had
captured markets the world over.  The  new  economic  age  had  begun.  What
happened ?  (Appendix, pp. 486) Will the American economy guess the  riddle
of Japan ?