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 it’s 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 author’s mind. The 14 Points stress on the changing of the way of

thinking, adopting a new philosophy, alteration in one’s 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 everybody’s 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 everyone’s consciousness trying to make upheaval in everyone’s 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 everyday’s 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 ?