W. Edwards Deming came to Philadelphia last week to preach to the…
500 Area Disciples Hear The Gospel According To Deming
By Andrea Knox, Inquirer Staff Writer
POSTED: March 20, 1988
W. Edwards Deming came to Philadelphia last week to preach to the converted.
There he was, American industry's new cult hero, the Mike Schmidt of management, the Bogart of business, telling 500 managers from Philadelphia- area companies that they were going about their business all wrong, and they were nodding their heads in agreement and lining up afterward to have him autograph copies of his book.
It's a common scene at the 24 to 30 seminars Deming gives throughout the United States each year to expound his management methods.
Those methods command a lot of respect, after all, credited as they are with aiding the post-war transformation of Japanese manufactured goods from schlock to high-quality items that could compete with, and even outclass, those made in the United States.
Eight years ago, Deming was belatedly discovered by an American industry desperate to recapture the ground and prestige it had lost to his star pupils.
Since then he has acquired a reverential and growing following among American managers. That following is particularly big and reverential in Philadelphia. The area was a prime candidate for some sort of savior after losing hundreds of thousands of manufacturing jobs in the 1970s, and in 1983 the Greater Philadelphia Chamber of Commerce began spreading the Deming gospel to local companies.
Only a fraction of the area's companies have been exposed to Deming's methods, and not all of those are actively implementing them. Deming himself warns that his principles are not "instant pudding" and that a company may spend 10 or 15 years implementing his principles before it begins to see quantifiable results.
But ask Rohm & Haas Co., ask Brooks Manufacturing Corp., ask Hercules Inc., ask the owner of the Valley Forge Convention Center (in which Deming was preaching his message last week), ask any of them about the power of that gospel, and the answer comes back: "Amen. What a difference it has brought to our lives!"
Frequently, the difference is expressed in quality-of-worklife terms that are felt to be important but whose benefits can't be measured directly: communication and cooperation have improved, executives say, or employees are happier and working better because they now have a say in deciding how to do their jobs.
But a few Philadelphia-area companies say the Deming difference is demonstrably flowing through to their bottom lines.
* At Hercules, a Deming-style team in the coatings and additives division identified a potential for $2 million in yearly cost savings.
* Brooks Manufacturing, a Philadelphia company that makes electrical-power- surge protectors for the electronics industry, estimates it saved $25,000 and created 12 new jobs by using Deming quality-improvement methods.
* At Valley Forge Plaza, which includes the Valley Forge Convention Center and two hotels, group sales are up 43 percent this year as a result of a switch to Deming principles, says developer and owner Leon Altemose.
* Rohm & Haas estimates that it gained or retained about $100 million worth of business and realized about $20 million in cost savings in 1986 alone, thanks to its implementation of Deming principles.
Even the Internal Revenue Service Center in Northeast Philadelphia, where there were massive processing problems a few years ago, is using Deming methods to cut down on errors and processing times and make employees happier in the bargain.
What these organizations and perhaps a few dozen other local Deming practitioners have adopted, and what Deming was here last week to expound, is a way of running a company based on teamwork between workers and managers and a continual search to improve the product or service.
Most of them have been introduced to the Deming principles through seminars, workshops and roundtables conducted by the Philadelphia Area Council for Excellence (PACE), an arm of the Chamber of Commerce.
The Chamber decided to focus its economic-development efforts on spreading Deming's message at the urging of Mary Ann Gould, a Deming disciple. Then president of Janbridge Inc., a circuit-board manufacturer, Gould argued that it made more sense to help existing businesses get stronger than to attract new companies, because "without companies that are sound and prospering, all our economic-development programs are just replacing one company with another as they drop off."
Persuaded, the Chamber established PACE, which sponsors an ever-growing list of programs, including an annual visit from the master himself to present his four-day seminar.
The message last week was the same as always: Workers want to do their jobs right and have very sound ideas about how to improve the quality of products. It's management that's the stumbling block.
He shook his head at the idea of merit raises, saying they encourage people to do what pleases their bosses rather than to seek out what actually needs to be done to improve the system.
He warned that organizations can't function properly unless they wipe out the fear that keeps employees from pointing out bottlenecks and suggesting improvements.
He conducted his famous red-bead experiment, used to demonstrate that defective products are created by a poor system rather than by poor workers, and that improvements in quality can only come from analyzing what is wrong with the system and changing it.
What this means in practice can be something as small as the incident described in a Wednesday afternoon workshop by John Lawson of Sun Co.'s Lube Service Center in Marcus Hook.
"We created a team to see how the Deming processes would work and got a 40 percent reduction in damaged goods in the warehouse," he said. "There was no major impact, but it proved to us that the processes worked."
It can be something as small as a new policy at the IRS center to make replacing files a higher priority, so that records are where they should be when the next user needs them.
It can be something with benefits as unquantifiable as getting employees who will use a new production plant involved in the design, as is happening at Microcircuit Engineering Corp. in Mount Holly.
Or it can be something as dramatic as Rohm & Haas' success in supplanting two competitors, one of them a Japanese company, as the supplier to Pioneer Video of polymers used to make video disks.
When Rohm & Haas first took samples of its polymers to Pioneer, a California subsidiary of a Japanese company, they were rejected because of contamination. In the pre-Deming days, "we might just have said, 'Well, that's as good as we can make it,' " and dropped the matter, says Jim Dunn, business manager for plastic resins.
Instead, a team from the plastics group reviewed the entire polymer- manufacturing process, discovered where the contamination occurred and eliminated the problem with new equipment and new processes.
The result was a product that was consistently better than that of the American competitor and frequently better than that of the Japanese supplier, both of which were dumped by Pioneer in favor of Rohm & Haas. The business brings in sales of about $1 million a year, and Rohm & Haas may be able to double that by selling to companies in Japan, if shipping problems can be solved.
These successes stand as beacons in a sea of old-style management.
One group of employees at last week's seminar said their company gives lip service to Deming principles but no real support. Another group, from a Fortune 500 company that publicly flaunts its Deming involvement, complained that customers still frequently don't get their orders on time and that employees even get their paychecks late.
One research director, from another company that claims to be a staunch Deming proponent, lamented that he is forced to rank his staff, with the lowest-ranked liable to be laid off at any time. "How can they expect to attract qualified people under those conditions?" he said.
Despite such discouraging tales, Mary Ann Gould, the woman who started it all, is convinced that Philadelphia companies are on the brink of seeing it happen.
"You are seeing results in certain pockets," she says. "And these people are going out and talking to let others know what they've experienced. We've started to create a group of champions" who will, in their turn, bring new believers into the Deming fold.