Dr. William Edwards Deming (October 14, 1900 – December 20, 1993) was an engineer, statistician, professor, author, lecturer, and management consultant He helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.
Deming was asked to go to Japan after World War II to help with the Japanese census, and later to improve radio manufacturing. Japanese business leaders knew about his abilities, and asked him to teach them about quality improvements.
A fundamental question is always raised in front of business leaders "Do we really need to improve our processes? Edwards Deming, in his book "Out of the Crisis" published in 1986; answered this question in his famous chain Reaction shown in the figure below. The benefits from quality and process improvements to all types of organizations including the construction business are:
Improve Quality;
Costs decrease because of less rework, fewer mistakes, fewer delays, better use of machine-time and materials;
Productivity Improves;
Capture the market with better quality and lower price;
Stay in Business;
Provide jobs and more jobs.
The Deming Chain Reaction shows why improving quality is key to achieving business success and increasing the number of jobs to society. This fact was thoroughly understood by W. E. Deming, and in his books and lectures, he insisted on this survival as the goal for any organization, as opposed to the short-term search for profit.
Better productivity implies lower production costs. The question is not to produce more, but to produce more effectively, and thus produce more economically. Cost reduction allows companies to decrease prices, and to exploit improved effectiveness as an advantage in a competitive world.
The natural effect of reducing prices, according to classical economic theory, is increased sales, thus gaining market share and widening the company’s presence in markets. W.E. Deming emphasizes the true aim of the organization at this point: long-term survival, understood as a long-term profitable presence in the market.
Finally, the increase in market share means growth for the company, which may need to hire new staff, thus contributing to community development and increased welfare.
The aforementioned chain reaction shows the concatenation of facts generated by an improvement in quality. This concatenation is not automatic, but defines a logical path that is frequently followed in organizations.
But, and there is always a “but”, the path can be different. After the first three steps, once the organization has improved its productivity, the lines of action can be oriented not towards growth and job creation, but to downsizing and cutting jobs. In some cases, this can be oriented to the primary goal of staying in the market, in a market that is more and more demanding, and where suppliers are under customer pressure to reduce costs.
Sources:
Aichouni, M. 2012. On the use of the basic quality tools for the improvement of the construction industry: A case study of a ready mixed concrete production process. International Journal of Civil & Environmental Engineering IJCEE-IJENS Vol:12 No:05
Garcia, A. 2015. Quality and sustainability: The Deming's chain reaction. Safety Engineering, Valencia, Spain. DOI: 10.7562/SE2015.5.01.07
Comments