JICA Project Briefing Paper

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1 JICA Project Briefing Paper TQM IN JAPAN Deming, Juran and Ishikawa Dennis S. Tachiki Faculty of Business Administration Tamagawa University If Japan can achieve high quality products and services, why can t Bangladesh? The current situation in this country is very similar to the situation in Japan between the two world wars. This briefing paper outlines some of the major measures Japan adopted to rise from the ashes of war and become an economic power. The field of quality control in Japan dates back to the 1930s, when Japanese scholars were active in translating the British statistician E.S. Pearson s book on the Application of Statistical Methods of Industrial Standardization and Quality Control (1935), the American statistician Walter A. Shewhart s book on the Economic Control of Quality of Manufactured Products (1931) and other related materials to improve industrial production. Much of this know how stayed in the hands of a small group of statisticians and engineers; however, after World War II many managers began to use these ideas in their daily business activities. 1 W. Edwards Deming, Joseph M. Juran and the Union of Japanese Scientists and Engineers (JUSE) played important roles in shaping what we now know as total quality management (TQM). W. Edwards Deming In 1949, the Supreme Commander of Allied Powers, the allied occupation forces headquarters, invited the distinguished statistician W. Edwards Deming to Japan. He would return to Japan one year later to lecture at the now famous eight-day JUSE seminars where he introduced the quality control practitioners to three basic ideas. The first idea Deming introduced to JUSE was the PDCA Cycle Plan, Do, Check and Action. 1 In the immediate postwar era, the main nomenclature was TQC (total quality control); however, in the 1980s this gave way to TQM (total quality management) to shift the focus from product and service quality to the management of achieving customer satisfaction (i.e, quality). Depending on the time period, then, I will interchangeably use TQC and TQM.

2 ACTION CHECK PDCA CYCLE PLAN DO Managers are expected to make business decisions but they do not always have the resources to fully execute it. The PDCA Cycle is a systematic method guiding managers to consider not only going from planning to execution, but continuing further to evaluate whether a work unit s goals have been achieved (check) and then decide what remedial steps are necessary to achieve their work unit s goals (action). In the plan phase, you define a problem and the methods for solving it. In the do phase you engage in education and training and then implement the plan. In the check phase you evaluate the effects of the implementation based on the measures and metrics adopted in the plan phase. And in the action phase you take the appropriate measures to close the performance gap between what was planned and the actual outcomes. This cycle is repeated continuously (i.e., kaizen) leading to better and better levels of product and service quality. The second idea he introduced to the JUSE was Shewhart s statistical quality control (SQC) and statistical process control (SPC) techniques. Managers are expected to make Kaizen on the spot decisions; however they have little time to look at the big picture. To allow managers to see the bigger picture, Deming demonstrated the power of managing by fact, not by guts (i.e., intuition) through statistical methods. In this connection, perhaps the most known SQC/SPC tool is the control charts. 7 days 1 day 0 CONTROL CHART Upper Limit 3.5 days X Lower Limit Upper Limit R Lower Limit The number of days it takes for a client to receive her/his residency document from the local government agency. t 1 t 2 t 3 t 4 t 5 A control chart shows whether a process is stable or abnormal. Take the case of a client visiting a local government agency to request a residency document. The work unit policy is to process the document within one day (lower limit) but no more than seven days (upper limit). Current it takes on average (x) three and half days. A process is stable if the line graph over t 1, t 2, t 3, t 4 and t 5 Project for Enhancing the Capacity of Public Service Training in Bangladesh 1

3 (where t = time period interval for collecting sample data on a business activity within a work unit) is within the upper and lower limits. This is the case for time periods t 1, t 2, t 3 and t 5. Fluctuations outside the upper and lower limits indicate abnormality that must be investigated and eliminated. This is the case in time period t 4. Instead of waiting for client complaints, a manager would immediately know something is wrong in the processing documents and would investigate what corrective action to take. Deming showed the JUSE how to apply this simple but powerful chart in reducing defects and achieving quality standards. The third idea he introduced was the importance of sampling inspection and dispersion range, average deviation, variance and standard deviation in statistical data. The basic assumption underlying this concept is that all production processes fluctuate; however, it is important to differentiate between naturally occurring fluctuations (uncontrollable) and unwanted errors (controllable). For example, in the control chart above, the trend line for R (range) does not exceed the upper and lower limit at t 4, suggesting this may be an uncontrollable fluctuation that is, in this case a national strike. Deming showed the JUSE how to use these statistical concepts to identify and focus on eliminating unwanted errors from work activities. In short, Deming s main contribution to the development of Japanese TQC was to introduce the concepts and statistical tools for improving product and service quality (see Deming 1986 on his 13 Points ). In his honor, the JUSE named their prestigious quality control award after him that is, the Deming Prize. Joseph M. Juran When JUSE first began promoting the TQC idea in Japan, it encountered resistance from senior and middle management. Senior managers saw quality control activities as adding unnecessary overhead costs. Middle managers did not want the technical staff to interfere in the administration of their work units. In 1954, the JUSE invited Joseph M. Juran, a management consultant, to deliver a series of lectures under the theme of Quality Control and Management to learn how to unblock these organizational bottlenecks. For senior managers who think quality control activities are a waste of time, Juran drew upon the Pareto principle in response. This principle states that some phenomena occur more frequently (the vital few) than others (the trivial many). To illustrate this principle, he introduced the JUSE to the Pareto Diagram, a simple tool for rank ordering the frequency a problem occurs. In the figure below, the horizontal axis lists the possible causes contributing to a work issue. For example, out of the eight Project for Enhancing the Capacity of Public Service Training in Bangladesh 2

4 Missing information Inadequate staff training Lack of computer Misplaced files Copy machine breakdown Staff Miscommunication Low morale Electric shortage problems delaying a client receiving her/his residency document within one week from a local government agency, just eliminating missing information would save three days in document processing time. After solving this problem, the next step is to provide more staff training and then consider purchasing computers. In short, a Pareto Diagram allows managers to distinguish between the vital few issues from the trivial many issues. Then, rather than fighting fires (handling problems as they arise each day), top management should proceed step-by-step to solve the issues hindering employees from achieving the overall goals of their work unit. PARETO DIAGRAM days % Correcting missing information 50 2 problem reduces the document processing time by 1 0 to the JUSE is that middle managers play a key role in planning, control and improvement of product quality, the three key elements of the Juran trilogy (Juran and Godfrey 1998). Juran pointed out that quality control refers to not only product quality, but also the quality of the work process. The technical staff has responsibility for product quality but it is the middle managers who have direct line responsibility for ensuring that the work process flows smoothly. Consequently, as products move across functional departments, managers must cooperate with each other to eliminate unwanted errors and delays causing consumers dissatisfaction. Juran s main contribution to Japanese TQC, then, was to bring management into the quality control picture formerly dominated by the technical staff. In doing so, the JUSE began to shift its national quality promotion activities from a focus primarily on statistical quality control techniques and towards what would become total quality management. A second message he conveyed Quality Control Research Group Engineers and academics established the Union of Japanese Scientists and Engineers (JUSE) in 1946 to promote the use of quality control methods in Japanese industry (see This organization carries out a wide range of activities; however, let me focus on Project for Enhancing the Capacity of Public Service Training in Bangladesh 3

5 the activities of the Quality Control Research Group (QCRG) to illustrate how to take the know how from other countries and adapt it to the local sensibilities in one s own country. JUSE organized the QCRG in 1949 to scan the international quality control field for best practice in three areas: (1) methods for rationalizing production in industry, (2) methods for improving the quality of export goods and (3) methods that would raise the living standards of the Japanese people from the ashes of war. In short, the mission of the QCRG clearly linked quality control methods to national policies addressing issues confronting industry and society. Under this mandate, one key point about the QCRG is that the members were academics and practitioners rather than consultants. When academics and practitioners evaluate a wide variety of quality control methods they are more objective in distinguish between a management fad and what is best practice than consultants who are unlikely to promote a method related to their consulting services. Consequently, early in this history of TQM in Japan, companies could avoid the costly search cost and the even more costly consultant fee in order to arrive at best practice. This was an important factor in the relatively rapid spread of the TQC idea across the private sector in Japan. By putting the private consultant in a supportive role and giving academics and practitioners the leading role in evaluating best practice, it is interesting to note that the Japanese business community was quicker in realizing the merits of Deming and Juran s approaches to quality control than their American counterparts. Indeed, the Americans were to ask several decades later in a famous NBC television program If Japan Can, Why Can t We? Another key point about the QCRG is that they did not naively adopt a best practice. What works in one culture does not necessarily work in another culture. Instead the QCRG experimented with ways to adapt the foreign ideas to the Japanese business environment. For example, one innovation was to make quality control not only the responsibility of the technical staff, but also the line managers. This reduces the tension between staff and line mangers over turf (scope of responsibility) as well as make quality a central part of a work unit s daily business activities rather than something extra you do if you have time. Many of these simple adaptations of best practice made the content of the QC Basic Course, a day training workshop spread over six months, much easier for managers and engineers to understand the concept of TQC. Kaoru Ishikawa, a prominent figure in the QCRG, played a major role in the development and diffusion of the TQC idea in Japan. He was instrumental in (1) simplifying complex statistical concepts and tools Project for Enhancing the Capacity of Public Service Training in Bangladesh 4

6 for use in business (e.g., cause and effect diagram, also called the Ishikawa Diagram) and (2) turning the product development sequence on its head by starting with the voice of the customer rather than research and development. It is still worth reading his publications, especially What Is Total Quality Control? (1985) and Introduction to Quality Control (1990). UNION OF JAPANESE SCIENTISTS AND ENGINEERS Engineers and academics established the Union of Japanese Scientists and Engineers (JUSE) in 1946 to promote the use of quality control methods in Japanese industry. This organization carries out a wide range of activities (see next section on JUSE). In connection to our discussion, however, let me focus on the activities of the Quality Control Research Group (QCRG) to illustrate how to take the know-how from other countries and adapt it to the local sensibilities in one s own country. JUSE organized the QCRG in Members of this research group were active in scanning the international quality control field for information in three areas. First, methods for rationalizing production in industry. Second, methods for improving the quality of export goods. And third, methods that would raise the living standards of the Japanese people from the ashes of war. In short, the QCRG had a clear mission to address pressing issues confronting industry and society through quality control methods. The QCRG played a pivotal role in scanning for best practice in quality control, adapting it to the Japanese business environment and diffusing it through low-cost publications and training courses. One key point about the QCRG is that they evaluated a wide variety of quality control methods to distinguish between a management fad and what is best practice. Consequently, companies could avoid the costly search cost and the even more costly consultant fee in order to arrive at best practice. This was an important factor in the relatively rapid spread of the TQC idea across the private sector in Japan. In this connection, it is interesting to note that the Japanese business community was quicker in realizing the merits of Deming and Juran s approaches to quality control than their American counterparts. Indeed, the Americans were to ask several decades later in a famous NBC television program If Japan Can, Why Can t We? Another key point about the QCRG activities is that they did not naively adopt a best practice. Instead they experimented with ways to adapt the foreign ideas to the Japanese business environment. For example, one innovation was to make quality control not only the responsibility of the technical staff, but also the line managers. This reduces the tension between staff and line mangers over turf (scope of responsibility) as well as make quality a central part of a work unit s daily business activities rather than something extra you do if you have Project for Enhancing the Capacity of Public Service Training in Bangladesh 5

7 time. These simple innovations are the basis for the QC Basic Course, a day training workshop spread over six months on quality control for managers and engineers. Today JUSE is among the leading organizations promoting quality control in Japan. It is the headquarters for QC circle activities in Japan and the secretariat for the prestigious Deming Prize. JUSE also plays an important role in promoting quality control throughout the world through involvement in such organizations as the International Association of Quality and the International Convention for QC Circles. Kaoru Ishikawa was a prominent figure in the JUSE. He played a major role in the development of the TQC idea in Japan (Ishikawa 1990) and with his wide circle of colleagues and students he was instrumental in (1) simplifying complex statistical concepts and tools for use in business (e.g., cause and effect diagram, also called the Ishikawa Diagram) and (2) turning the product development sequence on its head by starting with the voice of the customer rather than research and development. It is still worth reading his publications, especially What Is Total Quality Control? (1985) Project for Enhancing the Capacity of Public Service Training in Bangladesh 6

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