Edwards Deming, Supply Chain Visionary?

This is my contribution to the Supply Chain Anti-trends Cross Blogging series organized by Michael Lamoureux of Sourcing Innovation. The Strategic Sourcerer contributed with a farewell to golden parachuted fat cat CEOs and two other articles. Anti-trends are simply trends going in the opposite direction from the prevailing ones. Sometimes it takes the force of financial and industrial giants falling to their knees to create the countervailing wind, or anti-trend.
The fall of giants and the cycle of boom and bust should comes as no surprise to anyone who reads history, a topic still taught at some schools, but knowledge of which is not required of our CEOs. Considering that the lessons history teaches us are that power corrupts, all conflicts end badly, and that no matter how good things may be, this too shall pass, we would do well to look backwards in reflection once in a while. Or to make the History Channel the standard in-flight entertainment on all corporate jets.
Not so long ago a man was unappreciated in his own land, revered in a land across the ocean, and gradually recognized for his contribution. The man was Dr. Edwards Deming, the country that ignored him was the United States, and the land where he met fame and success was Japan. His advice is as hard to take now as ever, but we have the tale of two automotive industries, the American and Japanese, as a case in point on whether we should give Deming’s ideas serious consideration again.
Looking at them from a supply chain and sourcing perspective, they are surprisingly relevant. Although it may be wishful thinking, part of me says that about 70% of Deming’s 14 points are supply chain anti-trends of 2009 which will end up being long-term trend and standard approach. The supply chain emphasis has been added, with the exception of #4 for which there was no need to add any words.

  1. Create constancy of purpose for the improvement of the supply chain with the aim to become competitive, stay in business, and provide jobs.
  2. Adopt a new philosophy of cooperation (win-win) in which everybody in the supply chain wins and put it into practice by teaching it everyone in the supply chain.
  3. Cease dependence on mass inspection to achieve quality in the supply chain. Instead, improve the process and build quality into the supply chain in the first place.
  4. End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost in the long run. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
  5. Improve constantly, and forever, any activity in the supply chain. This will improve quality and productivity and thus constantly decrease supply chain costs.
  6. Institute training for skills across the supply chain.
  7. Adopt and institute leadership for the management of suppliers, recognizing their different abilities, capabilities, and aspiration. The aim of leadership should be to help suppliers do a better job. Leadership of supply chains is in need of overhaul.
  8. Drive out fear and build trust across the supply chain so that everyone can work more effectively.
  9. Break down barriers across the supply chain. Abolish competition and build a win-win system of cooperation across the supply chain. People in research, design, sales, and production must work as a team to foresee problems across the supply chainand use that might be encountered across the supply chain.
  10. Eliminate slogans, exhortations, and targets asking for zero defects or new levels of productivity in the supply chain. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of individual suppliers.
  11. Eliminate numerical goals, numerical quotas and management by objectives across the supply chain. Substitute leadership.
  12. Remove barriers that rob people of joy of working across the supply chain. This will mean abolishing the annual rating or merit system that ranks suppliers and creates competition and conflict.
  13. Institute a vigorous program of education and self-improvement across the supply chain.
  14. Put everybody in the supply chain to work to accomplish the transformation. The transformation is everybody’s job.

When you read Deming’s ideas they still seem radical and contrary to what makes businesses successful today, even with the wisdom of hindsight to know that he was right. If any 10 of these things emerged as the trend in supply chains and sourcing in 2009, it would be a stunner. We still have such a long way to go.

1 Comment

  1. alex kubi

    February 21, 2009 - 6:14 am

    Hi Jon, I would like to be honest with you, you really seems to read my mind, when I told you that I have finished forming the ‘Vital Few’, on discussing the Operation Goal area, I insisted on supply chain Mastery. Yesterday we call in one of our biggest wood supplier and made a long term business deal in line with item #4.
    Well, got no much but as this conversation continuous, I will tell you exactly what we had, and how we did it?