Deming Association (New Economy). Deming William Edwards New Economy Edward Deming New Economy

The tyranny of the dominant style of management, the constant evaluation of people and organizations, competition - all this must be left in yesterday and open a new page in its history, says Edward Deming. The person who has done so much for Japan's economic prosperity talks about simple mechanisms that will lead you to growth, innovation, and a strong market position. The system of deep knowledge, described by him in his book The New Economy, is now vitally necessary for industrial enterprises, government bodies and the education sector, because only it is capable of leading modern society out of the crisis.

W. Edward Deming. New economy. - M .: Eksmo, 2006 .-- 208 p.

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The purpose of this book is to show the reader the path to knowledge, to make him want to learn. Engineering students can learn new tools and mechanisms, but they will need new management techniques to successfully apply their knowledge.

Chapter 1. How are things with us?

The knowledge needed to improve something comes from outside. Our problem is the formation of such a system of education and such a culture in which learning is valued. Innovation requires leaders. One president of the company wrote: "The staff of the plant is responsible for the quality of the products." No, the staff is not responsible for anything. He's just trying to do his job. The person who wrote the article - the president of the company - is the only one who is responsible for quality. The results of most types of management activities cannot be measured. For example, the benefits of training are not measurable. The current management style is the largest source of losses and losses, so enormous that their magnitude cannot be estimated or measured.

Chapter 2. Heavy casualties

What are the results of hard work and diligence? Answer: we only dig deeper into the hole in which we are already. Hard work and diligence alone will not get us out of the hole. In fact, it is only when we go beyond our knowledge that we notice that we are sitting in a hole.

Ranking is a farce. Labor productivity actually depends largely on the system in which a person works, and not on himself. How futile it is to rank people is a simple equation to understand. Suppose X- this is the contribution of some person, ( xy) - the influence of the system on its labor productivity. Let's say we have a number that describes the actual productivity of, say, eight errors per year, or $ 8 million in sales. Then: x +(xy) = 8 It is required to determine X... Unfortunately, in one equation we have two unknowns. Johnny from the sixth grade knows that this equation cannot be solved. Still, people who use merit-based incentives think they've found X... They ignore the second term - ( xy), which dominates the equation.

Ranking creates competition between individual employees, teams and departments. It demoralizes employees and is rooted in an inability to understand deviations. Merit-based pay sows discord among employees and emphasizes achievement of a certain rank, praise, rather than work. It destroys cooperation. The goal of every person in the merit-based reward system is to please the boss. As a result, morality collapses. Quality suffers. And the one who judges people puts them on the rungs of the hierarchical ladder, and does not help them to work better. The high performance reward is the same as the forecaster's reward for good weather. Incentive pay focuses on numbers and distracts from purpose. Teams, divisions of the company operate as separate profit centers and do not seek to optimize the entire organization. People lose hope that someone will someday understand the connection between their work and the work of others, because they do not communicate with each other.

The first step any organization must take is to draw a flowchart showing how the various building blocks relate to each other. Then everyone will understand what their work is. As a rule, if a company practices management by goals, its goal is fragmented between different departments or divisions. It is assumed that if each department or division makes its own contribution, then the company as a whole will fulfill the task. But this assumption is not entirely true: structural units are almost always interdependent.

Quantitative goals lead to distortion and fraud, especially when the system is unable to achieve them. Instead of introducing quantitative measures, managers should work to improve the process. Production rates are the closest relatives of quantitative targets. Results-based management does not diminish but exacerbate problems. What's wrong with this kind of management? It comes from the assumption that everything we encounter is caused by a specific cause. We, however, have to work on the system.

In my experience, most of the problems and opportunities to improve the situation correlate like this: 94% are from the system (management responsibility) and 6% from special reasons. This is why neither the diligence nor the skills of the workers can fix the fundamental errors of the system. Appointing a VP of Quality will only lead to disappointment and frustration. Quality is the responsibility of top management. It cannot be delegated to someone else.

The size of the most serious losses from actions or inaction of the leadership, according to Lloyd S. Nelson, is unknown. Nevertheless, we must learn to manage these losses. The belief that if a problem cannot be measured, it cannot be solved is a very costly myth. A careful analysis of the causes and effects of the dominant management system begs the question: Does anyone care about long-term profit at all?

The most important application of the principles of statistical quality control, by which I mean knowledge of common and specific causes, is in human resource management. Beware of common sense. Common sense encourages us to evaluate children at school, people at work, teams, departments, dealers, hospital costs. Common sense dictates that we set norms for individuals and groups. Common sense requires holding a conversation with operators when a customer complains about a product or service: "We talked to the operator, this will not happen again." It is important to work on the process that caused the error, and not with the person selling the low-quality product.

The dependence of the salary on the volume of sales is the wrong move. Better to pay sellers a fixed salary. If the company pays commissions, the focus is on sales. When she pays a fixed wage, the customer is the focus. If all planning comes down to numerical goals, then how do you achieve them?

Chapter 3. System introduction

A system is a network of interdependent components that work together to achieve a common goal. The system must have a purpose. Without a goal, the system does not exist. Such a goal should be clear to all its participants, be concretized in plans for the future. Purpose is a value judgment. (We are, of course, talking about human-made systems.) A system requires control. She cannot control herself. If systems are left to their own devices, they quickly become selfish, competing, independent profit centers and thus destroy the system. The secret lies in the collaboration of components for the benefit of an organization-wide goal.

It is the responsibility of management to direct the efforts of all components to achieve the goal of the system. We propose setting a goal for the organization that everyone - shareholders, employees, suppliers, customers, society, the environment - will strive for over a long period of time.

Human beings feel the need to move, not cars, trains, buses or airplanes. Choosing a goal is obviously a matter of clarifying values, especially when it comes to choosing between possible options. Any system requires guidance from the outside. The system cannot understand itself.

Everyone understands how their work relates to the work of others. Now he can work consciously. This diagram, as an organizational chart, is much more important than a regular pyramid. The pyramid only shows who is accountable to whom. The pyramid does not describe a production system. She says nothing to the employee about how to coordinate her work with that of her colleagues. The pyramid carries no message at all; it means, first of all, that everyone should like their boss (get a good mark). The client has no place in the pyramid. The pyramid as an organizational chart destroys the system. The pyramid contributes to the fragmentation of the organization.

Delayed effect. The effect of the actions of the management can manifest itself in a few months or even years. The immediate result is sometimes zero or negative. Therefore, the interpretation of the change may be erroneous. A simple example is training. The only immediate result is cost, expense. The effects of training will manifest itself over many months or even years. Moreover, it cannot be measured. Then why are companies spending money on training? Management believes the benefits will far outweigh the costs in the future. In other words, managers are guided by theory, not numbers. They show wisdom. An ill-conceived solution to a problem can produce immediate results in the right direction, but over time can cause disaster. For example, downsizing reduces the company's expenses, but in due time leads to serious consequences. At the same time, the benefits from one solution or another may not appear for a long time. This idea is illustrated by Peter Senge in the book.

A job description should go beyond just prescribing actions: do this, do this, do this or that. It should indicate why this work is needed, how it helps to achieve the goal of the entire system.

If all the components of an organization are optimized (each for individual profit, each is a prima), then the company itself will be ineffective. When the whole is optimized, then the individual components will be less efficient.

The failure of competition theory. If economists understood system theory, the role of collaboration in optimization, they would stop arguing that competition is the salvation.

Chapter 4. The system of deep knowledge

The dominant management style needs to be changed. But the system cannot understand itself, and therefore changes must come from the outside. This chapter demonstrates the outside view - a kind of lens that I call the deep knowledge system. The deep knowledge system consists of four interrelated components:

• understanding the system
• knowledge of deviations
• theory of knowledge
• psychology

Understanding the system. Fear leads to false numbers. If keeping a certain position is at stake, anyone will only give the boss good news. Statistical calculations and predictions based on false numbers lead to confusion, annoyance, and bad decisions. The leader must study the psychology of people, the psychology of the group, the psychology of society and the psychology of change. He also needs to know about deviations, conditions of system stability, general and specific reasons for deviations in order to effectively manage the system as a whole and human resources in particular.

Knowledge of deviations. We often make two costly mistakes:

• Mistake 1. Reacting to a result as if it was caused by a specific cause, while it was due to a common cause of rejection.
• Mistake 2. Reacting to a result as if it were due to a common cause of rejection, when in fact it was caused by a specific cause.

Dr. Shewhart has suggested procedures to help you minimize the economic losses from these mistakes. The process may or may not be statistically controlled. With statistical control, we can anticipate future deviations. Costs, labor productivity, quality and quantity can be predicted. In such cases, Shewhart spoke of a stable condition. Otherwise, the process is unstable, and then its "behavior" cannot be predicted.

Theory of knowledge. Management is forecasting. The theory of knowledge explains why management in any form is forecasting. Rational forecasting requires theory; it builds knowledge through systematic analysis and expansion of theory based on past predictions and observations. If there was no initial theory, there would be nothing to study or revise. Without theory, we have no questions to ask. Therefore, there is no knowledge without theory. Theory is a window to the world. Theory "flows" into foresight. Without foresight, experience and examples teach us nothing. Simply copying a successful example without understanding its theory can lead to disaster.

There is no true value for any characteristic, condition or condition as determined by measurement or observation. Each new measurement (change in operational definition) or observation gives a new figure.

Operational definition is a procedure that is formed within the concept of a means of communication and translates it into a certain way of measuring. In other words, it is a definition that a reasonable person can agree with and which he can use in practice.

Information is not knowledge. Knowledge depends on theory. Without theory, it is impossible to use the information that comes to us.

Psychology helps us understand people, interactions between people and circumstances, the relationship between customer and supplier, teacher and student, director and subordinate, and the management system. All people are different. The HR manager must be aware of these differences and exploit them to maximize the abilities and potential of each individual. This is not evaluating people. Unfortunately, governance today is based on the assumption that all people are the same.

Some have a natural learning propensity. Learning is the source of innovation. Some people have an innate desire to enjoy their work. Good governance helps us to preserve and enhance these inherited positive qualities.

Extrinsic motivation sometimes yields positive results indirectly. Some external stimuli build self-esteem. But complete submission to extrinsic motivation destroys individuality. External incentives destroy intrinsic motivation. No matter how much the salary increases, it will not affect the productivity of employees in any way.

A monetary reward or prize for an act that someone has performed solely for their own pleasure can be perceived as an insult. If a person receives an award from someone they don't respect, then they may feel humiliated. Anyone who is dependent on extrinsic motivation destroys their self-esteem. Children feel best when they manage to master new activities. Their intrinsic motivation is growing.

The most important thing a leader can do is understand what is important for a particular person. Thanks to this, the manager will be able to help his subordinates achieve better results and, possibly, replace external motivation with internal one. Cash reward for work done for pleasure is a demoralizing overestimation. Expressing gratitude means much more to a person than a monetary reward.

Chapter 5. Leadership

Understanding in-depth knowledge transforms management. Transformation in any organization takes place under the leadership of a leader. The leader's job is to help transform their organization. How does a leader achieve transformation? First, he has theoretical knowledge. Second, he feels responsible to himself and his organization for the necessary changes. Third, he is a practitioner. He has a phased plan and can explain it in simple terms.

Chapter 6. Human Resource Management

If you cannot argue with the boss, then it is not worth working with him.
Lieutenant General Leslie E. Simon, USA.

In fig. 3 shows some of the destructive forces arising from the existing style of rewards, as well as their consequences. They squeeze out internal motivation, self-respect and dignity from the individual, from his life, drop by drop. They cause fear in him, the need for protection and external motivation. The transformation in this book is designed to strengthen the bottom of the diagram and shrink the top from year to year.

Rice. 3. The forces shown at the top of the diagram are depriving people and the nation of innovation and hindering the development of applied sciences. We must replace them with management that will restore the strength of the individual.

An example of unfulfilled hopes. A certain corporation has set itself two goals:

• create an incentive system that recognizes excellence, innovation, dedication and dedication;
• create and maintain a stimulating work environment to attract, retain and develop proactive and talented people.

These goals are incompatible. The first goal will cause conflicts and competition between people, inevitably leading to demoralization. It will destroy the joy of work and prevent the second goal from being realized, no matter how noble it may be.

Rice. 4. Statistics on labor productivity or disruptions, if available, can be plotted on a graph. Indicators characterize the system and those outside it

Chapter 7. Experiment with red beads

Don't confuse coincidence with cause and effect
Gypsy Rennie

Rice. 7. Data obtained during the experiment; calculation of control boundaries; the results are shown in the graph (right); interpretation of the graph. Comparison with the previous experiment (left).

The process is under statistical control. The diligent workers did everything in their power. The only way to reduce the proportion of red beads in the final product is to reduce the number of red beads in the input material (which is the management's responsibility).

When it was over, I thought about my job. How often do people strive to do their best in a situation where nothing depends on them? And they try their best. What happens over time with their motivation, diligence, desire? Many give up.

The system turned out to be stable. The variance and results of diligent workers, while the system remained unchanged, were predictable. All deviations - differences in the productivity of the diligent workers in the process of sampling the red beads and the differences by day for each diligent worker - were rooted from start to finish in the process itself. There is no evidence that one worker was better than the other. Management's assumption that the three diligent workers who performed best in the past would remain the best in the future proved unfounded. Management is a prediction, not a game.

Now the reader can look for red beads in their own company and in their work.

Chapter 8. Shewhart and control charts

Dr. Schuhart has given the world a new vision of science and management. He invented a new way of analyzing homogeneity and heterogeneity. He saw two types of deviations - common cause deviations and special reasons deviations. Common causes of deviations are given by points on the control chart that do not go beyond the control limits for a long time. The common causes of deviations do not change from day to day and from batch to batch. The particular reason for the deviations is another matter altogether. It is detected at a point that goes beyond the control boundaries.

The next significant contribution of Dr. Shewhart was the conclusion that the best thing we can do is to make mistakes 1 or 2 as seldom as possible, i.e. adhere to rules that, in the long run, minimize the net economic losses from both types of mistakes. To this end, he came up with the so-called control charts and introduced the rules for calculating control boundaries. Pick points on the graph. A point outside the control limits would be a signal (a signal is an operational definition for an action) of a particular cause.

When a control chart indicates that there is no particular cause, we are talking about a stable process or a process that is under statistical control. In a state of statistical control, the degree of compliance with the specifications makes sense. In the absence of statistical control, forecasting is impossible. The process is chaotic. The control chart in Fig. 7 is an example of a process in a statistically controlled state. When statistical control is achieved, process improvement follows, provided that the costs of it are expected to bring significant economic benefits. Improvement can be defined as follows: narrowing the deviation, reducing the mean values ​​to the optimal level, both options.

Acceptable boundaries are not control boundaries. Control limits can be calculated based on the available data. A point outside the control limits indicates the need to identify a particular cause and, if possible, eliminate it. I believe that there is no logical connection between control and acceptable boundaries. Control boundaries, once we have reached the true state of statistical control, describe the process and tell us what it will be like tomorrow. The control card is the voice of the process.

Examples of the wrong approach. After regular weekly inspections, an inspector complained that the plant had seven unlabeled toxic containers. Who was responsible for the violation? Find and punish him, otherwise this violation will happen again ... Any claim against malfeasance in medicine, construction or accounting implies that the event is caused by a special reason - i.e. happened through someone's fault. Studies with minimal application of the theory of deviations will lead to a different conclusion: the same event could have been the result of the process itself, i.e. well-established practices.

Chapter 9. Funnel Experiment

The purpose of this chapter is to demonstrate the waste of results-based interventions in the functioning of a system. Here's a simple funnel experiment.

Rule 1. Hold the funnel directly over the target and throw the ball through it 50 times. Each time mark the point of its fall (fig. 9). Rule 2. After each throw, move the funnel to compensate for the error from the last throw (for example, if the ball falls 30 cm above the target, move the funnel down 30 cm). As you can see, interfering with a stable process (moving from rule 1 to rule 2) only worsened the results.

Rice. 9. Points of fall of the ball according to rule 1 (left) and 2 (right)

Some of the mechanisms for misusing feedback are: interference with the economy at the level of federal or state law; playing "broken phone" ...

To improve a stable system requires a fundamental change in the process. If the system does not justify the cost of improvement, it may be better to focus efforts on other systems that are more worthy of attention. We must study the economic aspects of reducing variance.

Chapter 10. Some information about the theory of deviations

Deviation is life, and life is deviation. An example from life. A lawyer with an excellent education, but not familiar with statistical theory, explains each case with a specific reason - he does not know the difference between general and specific reasons.

Every leader should develop a habit of not asking for comment on ups and downs (daily, monthly, or yearly) caused by random changes.

Loss function describes the losses incurred by the system from various values ​​of the controlled parameter. It only applies to measurable losses. First of all, the loss function helps us move from the world of specifications (ie, conforming to specifications) to gradually reduce variance through process improvement. For practical purposes, we have presented the loss function as a parabola (Fig. 10). Dr. Taguchi called them a loss to society. It should be noted that the loss function does not have to be exact. In fact, there is no exact loss function.

Rice. 11. In order to incur minimal losses, strive to bring the production distribution function P (x) closer to the nominal value at which μ = 0

Moral: Measuring variance is not an achievement. It is much more important to center the deviation.

In the English version, it is somehow more familiar: PDCA (plan-do-check-act).

Edwards (or Edward) Deming is a well-known American consultant on the theory of quality management, as well as the creator of the "lean manufacturing" system and 14 principles of quality improvement. This man made a huge contribution to the development of management and economics. Although he mainly worked in Japan, his writings are popular all over the world. Many companies use the principles and proposals developed by Deming to develop and improve the quality of their production.

Deming's life

Back in 1900 in the United States, the future scientist Edward Deming was born. The biography of this man is rich in awards and prizes that he received for his contribution to the development of statistics and management. Deming Edward devoted sufficient time to training. He was educated at the University of Wyoming (in 1972 he received the award as the most outstanding student of this university), Colorado, Yale University. Over the years, Edward Deming received degrees in physics, mathematics and electronics.

Prior to working in Japan in 1946, Deming taught physics at the Colorado School of Mines (1923-1925) and worked for the United States Department of Agriculture (1927-1939). Working in Japan was the peak of his career and made him famous all over the world. In addition to her, Edward Deming has consulted in Greece, India, Argentina, Mexico, France and other countries. In the period 1947-1952 he was a member of the UN Sub-Commission on Statistical Samples.

Arriving in Japan, Deming had practically no connections, except for one statistician, Ishikawa Kaoru, who taught in By a lucky coincidence, his father was the head of an influential organization called the Federation of Economic Organizations of Japan (Nihon Keidanren). It was he who helped organize Deming's first seminar in 1950, which was attended by executives from 21 companies. These companies accounted for 85% of Japan's national capital.

The seminar was a success, and after that Deming became a leading consultant for large companies in Japan.

Edward Deming did not stop working until his death in 1993. In the United States, his ideas were recognized only in 1980. Despite his advanced age, the scientist continued to work and advise the heads of large companies in the United States and other countries of the world.

Deming's career and success were not easy at the beginning of his life as a scientist, but he was able to ensure that he was recognized throughout the world and not forgotten after his death. Deming's works and teachings are relevant for specialists today.

Family

In 1922, Edward Deming married for the first time. His family with Agness Bell did not last long, until 1930. Well-being was interrupted by the sudden death of his wife.

Two years later, the scientist married Lola Shup again. This time, family happiness lasted for 52 years, until Lola's death in 1984. From two marriages, the scientist left three daughters. All three and Edward Deming (pictured below) were without a doubt a strong and loving family. His daughters gave him seven grandchildren, and then five great-grandchildren.

Scientist works

During his career, Edward Deming made an unprecedented contribution to the development of management. His books received recognition and popularity. To date, three of his books have been published in Russian:

• "Out of the Crisis: A New Paradigm for Managing People, Systems and Processes".
• "Out of the Crisis".
• "New Economy".

Edward Deming made a huge contribution to the development. The “New Economy” just tells us that the “Western” principles of doing business are already outdated and the economy is entering a new era with new rules of the game.

Awards

Deming has gained worldwide recognition and respect throughout his career. His contribution to the development of management and economics has been confirmed by a number of awards:

• Order of the Blessed Treasure of the second degree (received in 1960 in Japan).
• National Medal of Technology (received in the USA in 1987).
• His name was carved on the wall in the Daytona Hall of Fame (1986).
• Award for Outstanding Career in Science (received in the USA in 1988).

Also in Japan in 1951 the award was approved, which bears the name of the scientist. It is received by people who have contributed to the development of the theory and practice of quality management.

It took Americans 30 years to appreciate Deming's work and recognize its relevance. The 14 principles of Edward Deming became known and recognized quite recently, although they were formulated back in 1980.

Deming began work on these management rules after the end of World War II. Despite the fact that a lot of time has passed since the inception of this idea and the final formulation, Deming's principles are still relevant today. All of these rules will work to improve efficiency if you take sufficient time to implement them in the process of modern business.

1. Setting the main goal

Do not chase instant and one-time profit. It is necessary to tune in to the long term and constantly improve. You need to strive to ensure that your company is competitive, provided with labor resources and provides quality and necessary goods.

2. Restructuring to a new philosophy

The Western style of management is no longer justifying itself and is slowly leading the economy to decline. In order to stay afloat, it is necessary to master new operating principles and apply them. Japan has started a new economic era, and today it is necessary to follow exactly these principles.

3. Independence from checks

Constant strict control and inspection should not be the way and the main goal for improving the quality level. The results of the checks should show that the quality is already at the maximum level, and will not be there after.

4. Cheap does not mean high quality

Don't go after cheap goods, pay attention to quality. If the supplier was unable to confirm the quality of his product, then you should not continue cooperation with him. By reducing the number of suppliers, you will come to long-term relationships and, as a result, lower overall purchasing costs.

5. Don't stop there

The process of improvement and improvement should never stop. Even if the system seems to be working perfectly, at the highest level, then know that there is always a process that can be contained even better. The earth does not stop for a minute, and every moment new ideas and new needs arise. Manufacturing, service delivery and planning processes can always get better and better than they are now.

6. Training of working personnel

Strive to ensure that personnel are familiar with and prepared for all changes that occur in the production and provision of goods and services. Engage in ongoing training of workers so that the staff is the most highly qualified.

7. Effective leadership

The manager should be maximally focused on the quality improvement process, show by his own example high performance indicators and a responsible attitude to work. The manager must ensure the functioning in such a way that in the event of defects, malfunctions, immediate measures are taken to eliminate them. Leadership should not be just a word, but a method of work. The manager should be primarily responsible for quality, not statistics.

8. Drive out fear

Fear is always a bad counselor, both in life and at work. Subordinates should not be afraid of their leadership. If a subordinate is afraid of his boss, then he will never be able to fully devote himself to work, since most of his thoughts during the working day will be focused on how to avoid a collision (meeting) with the manager. Go to meet your subordinates, be open to communication. Two-way communication always has a positive impact on the relationship between employees and their leaders. And as a result, it helps to improve the quality of work.

9. Say no to functional work

Many companies today work precisely according to this principle, that is, each division is engaged in its own narrowly focused work and does not cooperate with other departments. Edward Deming argues that working in teams, specialists of different profiles will come to the desired result much faster and more efficiently.

10. Abolish slogans, sermons and attitudes for employees

Slogans and sermons do not affect the overall process of work, but are aimed only at workers. The quality and productivity depends on the overall structure of the system, and not on the individual worker in particular. Slogans and attitudes are a waste of time and effort, which leads only to zero results.

11. Remove arbitrary norms

Instructions and standards for working with arbitrary rates and quotas should be avoided, or better not used at all. Help and feedback from senior management will most effectively affect the production process.

12. Remove barriers that prevent employees from being proud of their work.

The goal of staff work should not be quantity, but quality. Worker performance evaluations should be kept to a minimum.

13. Stimulate self-improvement

Today there is no need for workers who mindlessly carry out their tasks. In the conditions of the current service market, which changes every minute, knowledge and skills win. Provide employees with a self-development and professional development program. From this, the quality and efficiency will increase very quickly.

14. The most important thing is transformation

If the goal of a production system is high quality, then the production system must strive and be ready for constant transformation. Moreover, everyone in the company should be focused on changes in the system. And the leadership structure should be organized in such a way that every day give impetus to advance each subordinate.

The output of the book:

ISBN 5-699-17480-X (Eksmo), ISBN 0-262-54116-5 (English), UDC 330, BBK 65 01 (7USA), D30

New Economy / W. Edward Deming; [lane. from English T. Guresh]. - M .: Eksmo, 2006 .-- 208 p. - (EXPERT Library)

The tyranny of the dominant style of management, the constant assessment of people and organizations, competition - all this must be left in yesterday and open a new page in its history, says Edward Deming growth, innovation and a strong market position The system of deep knowledge described by him in his book The New Economy is vitally necessary now for industrial enterprises, government bodies and education, because only it is able to bring modern society out of crisis Dr. Deming offers a solution to implementation of which there will be no losers.

This book will be of interest to a wide range of readers who are not indifferent to the problems of social development in general and economic growth in particular.

Foreword

Notes for the second edition

Chapter 1. How are things with us?

Chapter 2. Heavy casualties

Chapter 3. System introduction

Chapter 4. The system of deep knowledge

Chapter 5. Leadership

Chapter 6. Human resource management.

Chapter 7. Experiment with red beads

Chapter 8. Shewhart and control charts

Chapter 9. Funnel Experiment

Chapter 10. Some information about the theory of deviations

Appendix

Purchase of goods and services

Subject index

Foreword

We continue to draw wisdom from the lessons of W. Edward Deming. Our father revised the manuscript for the second edition of New Economics for Industrial, Government, and Education until his death in December 1993. He sought clarity based on the readers' feedback on the first edition, and all the time he tried to help people acquire the knowledge they need to transition to a new management style. The road to change lies through the application of the deep knowledge system described in this book.

Throughout his long and fruitful life, our father has enjoyed work and study. In the New Economy, he wrote that "it is pleasant to work with a person who likes his work." Through communication with many people around the world, we know that Dr. W. Edward Deming helped others find joy in their endeavors and that his work touched the finest strings in their souls.

In November 1993, our father established the W. Edward Deming Institute. The purpose of the Institute is to promote understanding of Deming's deep knowledge system for global peace and prosperity. With the efforts of people dedicated to this goal, we hope to continue his life's work.

Diana Deming Cahill
Linda Deming Ratcliffe

Notes for the second edition

Dr. Deming worked on New Economics until his death in 1993. The second edition contains edits made by himself. Most of the changes go back to Chapter 4, where he emphasizes that the deep knowledge system is an outside perspective that is vital to the management of the system.

An application called "Purchase of goods and services" has also appeared. Dr. Deming introduced this material into his four-day seminars. It will be useful to readers who want to better understand his work on supplier relationships.

In the New Economy, the author makes numerous references to his previous work Overcoming the Crisis. The reader wishing to better understand the ideas of Edward Deming should first study this particular book. The reader will find more complete information about the doctor's life and a list of his publications in the article "The World of W. Edward Deming" * Cecilia Kilian, who has been its permanent secretary for 39 years.

For over forty years W. Edward Deming has consulted around the world. His clients included manufacturing, telephone, railroad companies, carriers, consumer research firms, social scientists, hospitals, government agencies, and research organizations at universities and industrial institutes and companies.

The impact of Dr. Deming's theories on manufacturing and the service industry in the United States has been enormous. The quality revolution he initiated has greatly increased the competitiveness of the United States.

In 1987, Dr. Deming received the National Order of Technology from President Reagan. In 1988 he received the National Academy of Sciences Excellence Award.

Dr. Deming has received many other awards as well, including the Shewhart Medal from the American Society for Quality Control in 1956 and the Samuel S. Wilkes Award from the American Statistical Association in 1983.

In 1980, the American Society for Quality Control established the Deming Annual Quality and Productivity Awards. Dr. Deming was a member of the International Statistical Institute. In 1983 he was elected a member of the National Academy of Engineering Sciences, and in 1986 the portrait of the researcher was installed in the Science and Technology Hall of Fame of the city of Dayton (USA). In 1991, his name was inducted into the Automotive Hall of Fame.

Dr. Deming is perhaps best known for his work in Japan, where he has trained senior management and engineers in various companies in quality control techniques since 1950. This training contributed to radical changes in the Japanese economy. In recognition of his contributions, the Japan Science and Technology Alliance established the annual Deming Award for Achievement in Product Quality and Reliability. In 1960, the Emperor of Japan awarded Dr. Deming the Order of the Sacred Treasure, Second Class.

In 1928, Deming received his Ph.D. in mathematical physics from Yale University. Subsequently, a number of universities awarded him JDs and honorary doctorates: University of Wyoming, Riviere College, University of Maryland, Ohio State University, Clarkson University of Technology, Miami University, George Washington University, Colorado State University, Fordam University, University Alabama State, Oregon State University, Yale University, Harvard University, Cleary College, and Shenando University. Yale University also awarded him the Wilbur Lucius Cross and Riviere College the Order of St. Mary Magdalene.

Dr. Deming has written a number of books and 171 articles. His work Out of Crisis has been translated into several foreign languages. Many books and films are devoted to the life, philosophy and lessons of the outstanding scientist. More than 10,000 people attended Dr. Deming's four-day seminars every year for ten years.

This book is intended for people living under the tyranny of the dominant management style. The huge losses caused by it have been leading our economy to decline for a long time. Most people think that such a management model has always existed and that it is unchanging. However, in fact, it was invented in our time and is based on interactions between people, which affects all aspects of our life - government, industry, education, healthcare.

We grew up in a competitive environment between people, teams, departments, divisions; students, schools, universities. Economists have taught us that competition will solve our problems. In fact, competition, as we now see, is destructive. It would be much better if everyone worked as a single system in the name of everyone's victory. This requires collaboration and a new management style.

The transformation of the existing system is possible with the help of deep knowledge. The deep knowledge system consists of four interrelated elements. This:

• understanding the system;
• knowledge of deviations;
• theory of knowledge;
• psychology.

The purpose of this book is to show the reader the path to knowledge, to make him want to learn.

My fourteen management principles are the result of applying deep knowledge to move from existing management style to optimization.

This book can also be used as a textbook for students of technical and economic universities. The goal of business schools should not be to preserve the currently dominant management style, but to transform it. Engineering students can learn new tools and mechanisms, but they will need new management techniques to successfully apply their knowledge. In other words, the school must prepare students for the future, not the past.

The first two chapters of this book describe the dominant management style and provide recommendations for improving it. Chapter 3 provides system theory. In an optimized system, everyone wins - shareholders, suppliers, employees and customers. Chapter 4 explores the in-depth knowledge framework that can be used to understand and optimize the organizations in which we operate. The following chapters develop the theory outlined in Chapters 3 and 4, providing practical examples for business, education, and government.

Many people have helped me with this book. Through the notes throughout the text, I express my gratitude to them. And it is with great pleasure that I pay tribute to my devoted secretary, Cecilia S. Kilian.

Year of issue: 2006

Genre: Economy

Publisher:"Eksmo"

Format: DjVu

Quality: Scanned pages

Number of pages: 208

Description: The book "New Economy" is intended for people living under the tyranny of the dominant management style. The huge losses caused by it have been leading our economy to decline for a long time. Most people think that such a management model has always existed and that it is unchanging. However, in fact, it was invented in our time and is based on interactions between people, which affects all aspects of our life - government, industry, education, healthcare. We grew up in a competitive environment between people, teams, departments, divisions; students, schools, universities. Economists have taught us that competition will solve our problems. In fact, competition, as we now see, is destructive. It would be much better if everyone worked as a single system in the name of everyone's victory. This requires collaboration and a new management style.
The transformation of the existing system is possible with the help of deep knowledge. The deep knowledge system consists of four interrelated elements. This:

• understanding the system;
• knowledge of deviations;
• theory of knowledge;
• psychology.

The purpose of the book "New Economy" is to show the reader the path to knowledge, to make him want to learn.
My fourteen management principles are the result of applying deep knowledge to move from existing management style to optimization.
This book can also be used as a textbook for students of technical and economic universities. The goal of business schools should not be to preserve the currently dominant management style, but to transform it. Engineering students can learn new tools and mechanisms, but they will need new management techniques to successfully apply their knowledge. In other words, the school must prepare students for the future, not the past.
The first two chapters of The New Economy describe the dominant management style and provide recommendations for improving it. Chapter 3 provides system theory. In an optimized system, everyone wins - shareholders, suppliers, employees and customers. Chapter 4 explores the in-depth knowledge framework that can be used to understand and optimize the organizations in which we operate. The following chapters develop the theory outlined in Chapters 3 and 4, providing practical examples for business, education, and government. Contents of a book

How are things with us?
Heavy losses
System introduction
Deep knowledge system
Leadership
Human Resource Management
Experiment with red beads
Shewhart and control charts
Funnel experiment
Some information about the theory of deviations
Purchase of goods and services

The country:

USA

Scientific area: Alma mater: Known as:

Quality management specialist;
Founder of Total Quality Management;
Quality management consultant to large American and Japanese companies.

Awards and prizes

1955 - Walter Shewhart Medal (American Society for Quality Control)
1963 - Order of the Sacred Treasure, Class II
1972 - The title of "Most Outstanding Graduate" of the University of Wyoming
1983 - Winner of the Frederick Taylor Award (American Management Association)
1983 - Winner of the Samuel S. Wilkes Prize (American Statistical Association)
1986 - Title of Honorary Member of the National Academy of Mechanical Engineering
1988 - Distinguished Scientist Title (US National Academy of Sciences)

Deming, William Edwards(eng. William edwards deming, October 14 - December 20), also known as Edward Deming- American scientist, statistician and consultant on the theory of quality management. Deming is best known for his innovative enterprise restructuring proposals, widely used in Japan and other countries under the name "Lean Manufacturing."

He is one of the founders of the American Society for Quality Control, established in 1946. He was awarded one of the most prestigious awards established by this society - the Shuhart Medal.

early years

William Edwards Deming was born in Sioux City, Iowa, raised in Polk City, Iowa on the chicken farm of his grandfather Henry Coffin Edwards, and then on a farm in Povella, Wyoming, bought by his father. Father - William Albert Deming (eng. William albert deming). Mother - Plama Irene Edwards (eng. Pluma Irene edwards) .

Work in Japan

Awards and titles

Dr. Deming is the recipient of the US National Medal of Technology and is inducted into the Hall of Fame for Achievement in Science and Technology. In 1960, Dr. E. Deming was awarded the Order of the Blessed Treasure, 2nd degree. This is one of the highest orders of Japan, awarded on behalf of the emperor.

Associations named after him work in many countries of the world.

A Brief Overview of Deming's Philosophy

Edwards Deming's philosophy is summarized as follows:

"Deming taught that by adopting appropriate management principles, organizations can improve quality while lowering costs (by reducing waste, rework, staff wear and tear and litigation, while increasing customer loyalty). The key is to practice continuous improvement and to represent production as a system and not as pieces and parts. "

In the 1970s, Deming's philosophy was summed up by some of his Japanese supporters by the following opposition:

A) When people and organizations focus primarily on quality, defined by the following relationship: (English:) then quality tends to increase, and costs decrease over time. b) However, when people and organizations focus primarily on "costs", costs tend to increase and quality decreases over time.

Deming's System of Profound Knowledge

"The established management style must undergo transformation. The system cannot understand itself. Transformation requires an outside view. The purpose of this chapter is to give a view from the outside - a magnifying glass that I call a deep knowledge system. It provides us with a map of theory in order to understand the organizations over which we are working."

"The first step is the transformation of the personality. This transformation has no duration. It comes from the onset of understanding the system of deep knowledge. The personality, being transformed, will begin to perceive a new meaning about his life, about events, about numbers, about the interaction between people.

“When a person reaches an understanding of the deep knowledge system, he will apply its principles in any kind of relationship with other people. He will have a basis for judging his own decisions and for transforming the organizations he belongs to. The transformed personality will:

• Set as an example;
• A good listener, but will not compromise;
• Constantly teach other people; and
• Help people break out of their current practices and beliefs, and move on to a new philosophy without feeling guilty about the past. "

Deming believed that all managers should have what he called the Deep Knowledge System, which consists of four parts:

1. Understanding the system : understanding the whole process in which suppliers, producers and consumers (or recipients) of goods and services are involved ( explained below);
2. Knowledge of deviations : range and reasons for deviations in quality, and the use of statistical sampling in measurements;
3. Theory of knowledge : concepts explaining knowledge and the limits of what can be known.
4. Knowledge of psychology : the concept of human nature.

Deming explained: “You don't need to be outstanding in any of these four areas of knowledge or in all four at once to understand it and apply it. The 14 points for management in industry, education and management naturally follow from them, as application of this external knowledge to transform the style of Western management present in the present to an optimized style. "

"The various segments of the deep knowledge system proposed here cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of change."

"The manager of people must understand that all people are different. This is not an assessment of people. He must understand that the performance of each is controlled mainly by the system in which he works, and the system is in the responsibility of management. A psychologist who has even a primitive understanding of changes will be shown in the experiment with red beads (Ch. 7) can no longer participate in improving the plan for assessing people. "

Understanding the system involves understanding how interactions (e.g., feedback) between system elements can lead to internal constraints that will cause 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, and not its individual elements. Thus, it is the structure of the organization, rather than the employees, one at a time, that holds the keys to improving the quality of the output, the output of the system.

Knowledge of deviations includes the understanding that everything that is measured consists of both "normal" deviations due to the flexibility of the system, and "special reasons" that create defects. Quality involves recognizing the difference between them to eliminate "special causes" while controlling normal deviations. Deming taught that making changes in response to a "normal" deviation would only make the system perform worse. Understanding variance includes the mathematical certainty that the variance usually occurs within six standard deviations of the mean.

The in-depth knowledge system is the basis for the application of Deming's famous 14 Control Points, described below.

Deming's 14 key principles

1. Consistency of purpose: Set a goal and be consistently firm and consistent in achieving your goal of continuous improvement of products and services, allocating resources in such a way that long-term goals and needs, not just short-term profitability, are met to achieve competitiveness, maintain the enterprise and keep people in work.
2. New philosophy: Adopt a new philosophy. We are in a new economic era started in Japan. We can no longer get along with the generally accepted level of delays, errors, defects in materials, defects in work. A transformation of Western management is needed to stem the continuing decline of the economy.
3. End addiction to mass control: Eliminate the need for mass inspection and inspection as a way to achieve quality, primarily by building quality into products. Demand statistical evidence of “built-in” quality both in the manufacturing process and in the procurement function.
4. End the practice of purchasing at the lowest price... Instead, along with the price, ask for serious confirmation of its quality. Reduce the number of suppliers of the same product by rejecting the services of those who could not statistically confirm its quality. Strive to receive all shipments of a given component from only one manufacturer, based on the establishment of a long-term relationship of mutual loyalty and trust. The goal in this case is to minimize the overall costs, not just the initial ones.
5. Improve every process... Improve constantly, today and always, all the processes of planning, production and service delivery. Continually look for problems in order to improve all the activities and functions in the company, improve quality and productivity, and thus continuously reduce costs. Continuous improvement of the system, which includes development and design, supply of components and materials, maintenance and improvement of equipment operation, management and organization methods, training and retraining of personnel, is the primary responsibility of management.
6. Introduce training and retraining of personnel into practice: Put into practice modern approaches to training and retraining for all workers, including leaders and managers, in order to better use the opportunities of each of them. In order to keep up with changes in materials. methods, product design, equipment, technology, functions and maintenance methods require new skills and abilities.
7. Establish leadership... Learn and practice leadership as a work method designed to help workers do their best job. Leaders at all levels should be responsible not for bare numbers, but for quality. Improving quality automatically leads to higher productivity. Managers and managers must ensure that immediate action is taken when signals are received of defects, faulty or malfunctioning equipment, poor tools, unclear work instructions, and other factors detrimental to quality.
8. Cast out fears... Encourage effective two-way communication and use other means to root out fear, fear and hostility from within the organization so that everyone can work more efficiently and productively for the good of the company. Any employee who has fear of their supervisor cannot properly cooperate with him. The best that can be expected in such circumstances is resentful submission, which is exactly what such a leader desires. However, this state of affairs will never lead to good results. True collaboration can accomplish much more than isolated individual effort. But this interaction cannot be good without cultivating mutual trust, confidence and respect. Those who work in fear try to escape the sight of those they fear. And how can you expect potential returns from people whose primary desire is simply not to be noticed?
9. Break down barriers between divisions, services, departments. People from different functional areas - researchers, developers, manufacturing, commercial and administrative representatives - must work in teams (teams) in order to troubleshoot problems that may arise with products or services. Most companies are functionally organized, but they must operate in an interoperable manner.
10. Give up empty slogans and appeals... Avoid using posters, slogans and appeals to workers that require them to work without defects, a new level of productivity, etc., but do not say anything about the methods of achieving these goals. Such calls only arouse hostility; most of the problems of poor quality and productivity are system-related and, thus, solutions are beyond the reach of ordinary workers.
11. Eliminate arbitrary number norms and assignments... Eliminate work instructions and standards that set arbitrary norms, quotas for workers, and quantitative targets for managers. Replace them with the support and assistance of your senior management to achieve continuous improvements in quality and productivity.
12. Give employees the opportunity to be proud of their work... Remove barriers that steal from workers and leaders, making them less proud of their work. This implies, among other things, the abandonment of annual appraisals (assessments of employee performance) and methods of management by goals. And again, the responsibilities of managers, supervisors, foremen should be shifted from achieving purely quantitative indicators to achieving quality.
13. Encourage the pursuit of education... Establish a vibrant education and self-help support program for all workers. An organization needs more than just people, it needs workers who improve as a result of education. Knowledge is the source of successful advancement in achieving competitiveness.
14. Top Management Commitment to Quality Improvement and Effectiveness... Clearly define senior management's unwavering commitment to continuous quality and performance improvement and their commitment to implementing all of the principles discussed above. However, not only will senior management earnestly declare their enduring commitment to quality and performance. It must also know what is what they are committed to, that is, what they should do. Form a structure in senior management that will provide momentum on a daily basis to move towards the 13 principles outlined above, and act to bring about change. Support is not enough here, concrete actions are needed.