Sarunas Abramavicius

"OUT OF THE CRISIS"

Summary

In his first Chapter of the book "Out of the Crisis", W. E. Demingpresents short pre-history of total quality management and it's meaning forthe economics growth in Japan. It gives the reader an incentive to come tothe conclusion, that poor quality means high costs and vice versa - highquality reduces the costs. It is given simplified scheme of this statementalong with many examples supporting it. But increase in quality does notmean buying new machinery and gadgets. The relating statement betweenelucidating the idea of total quality management in the first Chapter and
14 Points, which are the basis for transformation of American industry, inthe second Chapter, is cited below:
"If I were a banker, I would not lend money for new equipment unless thecompany that asked for the loan could demonstrate by statistical evidencethat 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 diseasesand 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 isto be done to be successful in the market is given in Chapter 2 -
"Principles for Transformation of Western Management". The purpose of thischapter and of Chapter 3 is to explain the elements of the transformationthat 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 lucidityof author's mind. The 14 Points stress on the changing of the way ofthinking, adopting a new philosophy, alteration in one's psychologicalattitude. A complex following of the 14 Points should lead the company tothe top. The last point gives a plan of actions to be made in order to putinto 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 oftransformation "and" ... afflict most companies in the Western World ".
(Ch.3. Pp.97) The writer of the book explains bad habits of every managerin almost every company. At the first sight nobody even could think thatemphasis on short-term profits or evaluation of performance or even meritrating 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 qualitymanagement is, what its purpose and the meaning is not only in theeconomics, but in the everybody's life of any of the member of any societyin the world. I dare to call this book as a new philosophy school, of whichthe leader - WEDeming - wishes to change the Western management,particularly to help out the American economics, but imperceptibly intrudesupon everyone's consciousness trying to make upheaval in everyone's way ofthinking.
In the next two chapters E. Deming predicts the period of time that hasto pass to improve total quality and gives some pieces of advice to helpthe management to understand its responsibilities.
The description and explanation of the quality, relationships amongquality, producer and consumer, heterogeneous meanings of the quality aregiven in the chapter 6 - "Quality and Consumer". One can find answers tothe questions what quality and quality of service is, what consumer andwhat the triangle of interactions is, what one can learn from the consumer.
Since Service industry plays huge role in economics, the improvement ofeconomics and the quality cannot do without the improvement of the qualityand productivity in service organizations, what the main point of the
Chapter 7 is. All the areas of the service industry are touched by theauthor, everywhere the attention is focused on the specific items in eachparticular sphere of the service industry. An abundance of realisticexamples shows the professionalism of the author and his understanding ofthe problems.
"... The aim of the leadership should be to improve the performance ofman and machine, to improve quality, to increase output, and simultaneouslyto bring pride of workmanship to people. Actually, most of this book isinvolved 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 tellwhat to do, but it is actually telling the people how to do, how to improvewhat has to be done, how to know how to do, how to evaluate by the means ofstatistical control. Some good examples are given. The charts reflect theway of examining the problems and give the answer to many questions.
Before even starting to improve the quality, everyone has to meet therequirement to accept operational definitions. There is no any way out inimprovement process without standards and regulations, which start withoperational definitions. These and other important questions are discussedin Chapter 9 and Chapter 10.
The failure to understand the information in variation causes the centralproblem in management and leadership. In Chapter 11 it is spoken of faultsof the system as common causes of trouble, and faults from fleeting eventsas special causes. The content of this chapter includes the deepestanalysis of many real examples taken from companies and proves thatstatistical control of the system using control charts lets discover bothcommon and special causes.
"More examples of improvement Downstream" - Chapter 12 is like acontinuation of Chapter 11. The next chapter provides us with the latentdanger of any new philosophy - some disappointments in Great Ideas. Everynew theory has its advantages and disadvantages. Not everything in the newphilosophy is so good as it may seem from the first view. But as it issaid, "disappointments arise from failure to understand four basicaxioms. "(Ch. 13. pp. 388)
Not only theoretical knowledge and examples from the real life are givenin the book "Out of the Crisis". E.W. Deming solves a bunch of practicalproblems from various spheres of industry, proving the fairness, clearnessand ability to apply his theoretical reasonings. The bibliography ofsources for advanced study is given as well in Chapter 15.
How to organize the system in the company, how to reorganize the presentsystem into the system, reaching improvement in quality, productivity,minimizing of costs is discussed in Chapter 16. Some very elementaryexamples from the everyday's life in Chapter17 - "Some Illustrations forimprovement 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 qualityidea. "The whole world is familiar with the miracle of Japan, and knowsthat the miracle started of with a concussion in 1950. (...) Suddenly,
Japanese quality and dependability turned upward in 1950 and by 1954 hadcaptured markets the world over. The new economic age had begun. Whathappened? "(Appendix, pp. 486) Will the American economy guess the riddleof Japan?