Dr. Deming: The American Who Taught the Japanese About Quality

CHAPTER 1 Management and QualityIn 1986 Ford emerged as the darling of the American auto industry. Earnings, for the first time since the 1920s, exceeded those of General Motors, and in fact exceeded GM's and Chrysler's combined. Ford's market share continued to increase at the expense of its two American rivals. Its new Taurus/Sable car line was an unqualified success, commercially and in the eyes of Detroit's critics. Consumer Reports magazine, not usually a fan of American automobiles, called the new cars the best American cars it had ever tested and used the Taurus as the standard by which to judge other domestic models. In its press releases and advertisements, however, Ford did not stress sales or marketing but quality. For the sixth year in a row Ford automobiles were rated highest in quality of all the domestic manufacturers.Subsequent years confirmed that Ford's success was not a fluke as earnings continued to exceed GM's and Chrysler's. Ford announced profit sharing for its hourly employees of over $2,000 per worker in 1987 and $3,700 in 1988. Some estimates of Ford's cost advantage over GM ran as high as $600 per car.Not bad for a company that in 1980 had seemed on the brink of disaster and which prior to 1980 hadn't enjoyed a reputation for quality, particularly when compared to the Japanese automakers.Back in 1980, while Chrysler was grabbing headlines with its brush with bankruptcy and the controversy surrounding the federal loan guarantee that kept its doors open, Ford was quietly suffering, hardly in better shape.But in 1983 a quiet revolution began at Ford. The quality of American cars was the biggest complaint at the time. Ford management knew something had to be done. In 1983 Ford asked the foremost American expert on quality, the world-renowned Dr. W. Edwards Deming, for help. To management's surprise, however, Deming talked not about quality but about management. All of Ford's top management attended Deming's seminars, and the company has not been the same since. Among those who attended was Donald Petersen, who later became chairman and proclaimed Ford's intent to implement Deming's philosophy throughout the company.In a letter to Autoweek, Petersen stated, "We are moving toward building a quality culture at Ford and the many changes that have been taking place here have their roots directly in Dr. Deming's teachings."While other old-line domestic manufacturers have begun implementing quality cultures, few have gone as far as Ford in revamping their way of doing business. A limited or partial application of the Deming philosophy doesn't have the dramatic results that a full application has. An August 18, 1986, article in Fortune stated, "By spreading Deming's philosophy throughout the company, Ford, in the view of consultants and market researchers who have made comparisons, has probably taken greater strides in improving quality than any other U.S. auto manufacturer....A company that decides to take its quality consultant seriously can take off on a road that will transform the whole corporate culture. As Ford found out, following the Deming path leads to a lot more than tinkering with the assembly line."Deming is no newcomer to American management or quality control. One of the founders of the field, he was actively involved in American quality control efforts during World War II, teaching engineers and academicians who in turn taught thousands of others. Many feel this program was integral to the success of the United States during the war.After the war, however, many companies that had initiated quality control programs began to lose their incentive and conviction. The primary goal for most American enterprises was to produce enough to satisfy the seemingly endless demand for goods of all kinds. One of the main reasons for the failure of quality consciousness to take hold in this country was that management had nRafael Aguayo is the author of 'Dr. Deming: The American Who Taught the Japanese About Quality', published 1991 under ISBN 9780671746216 and ISBN 0671746219.