Deming 14 Points at HP Malaysia

1.0 Introduction
Hewlett-Packard Company (HP) is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the Government, health and education sectors. Its operations are organized into seven segments: the Personal Systems Group (PSG), Services, the Imaging and Printing Group (IPG), Enterprise Servers, Storage and Networking (ESSN), HP Software, HP Financial Services (HPFS) and Corporate Investments. The Company’s offerings include personal computing and other access devices; multi-vendor customer services, including infrastructure technology and business process outsourcing, technology support and maintenance, application development and support services and consulting and integration services, and imaging and printing-related products and services.

http://topics.nytimes.com/top/news/business/companies/hewlett_packard_corporation/index.html 2.0 HP and Total Quality Management
A fundamental of Total Quality Management (TQM) is the concept of the internal customer. TQM was a result of the W Deming’s work within Japanese industry after the cessation of World War II. Deming built upon the original Total Quality concept developed by Feigenbaum in the 1950’s and introduced the notion that quality is a strategic activity and originates in upper management attitudes towards quality (Walton, 1985). Hewlett Packard has a long association with TQM and quality management tools such as Kaizen and was one of the pioneers of the internal customer concept. Starting with the ink cartridges division in Scotland, Hewlett Packard introduced a simple seven point check list to ensure that each function of the organisation was focused its internal customers and made a conscious effort to satisfy the needs of these internal customers. The Hewlett Packard guide was comprised of seven questions which addressed the questions – “what is the purpose of our existence and what can we do to excel at our purpose?”. The seven questions were: Who are my customers?

What are their needs?
What is my product or service?
What are my customers’ expectations of my service and how will these expectations be measured? Does my product or service meet their expectations?
What is the process for providing this product or service? What actions will improve this process?

By asking these questions each function, department and unit was able to understand that their primary purpose was not simply to produce, but to produce for the benefit of others, the internal customer. They could then apply a methodology to solve any problems and improve processes and quality.
This is important as many business units can see their own existence and the means to an end – as long as they produce, they are doing their job (Deming, 1994). 3.0 Deming’s 14 Points

3.1. Constancy of purpose:
Create constancy of purpose toward continual improvement of product and service, with a plan to become competitive and to stay in business. Management at HP has two concerns. One deals with running the business on a day to day basis and the other deals with the future of the business. They must have clarity on the questions; what are we doing, and why are we doing it? The answer to these questions requires knowledge and looking to the future. It is the difference between short term and long term thinking; the tortoise and the hare. HP creates constancy of purpose toward continual improvement of products and service, allocating resources to provide for long range needs, rather than only short term profitability, with the aim to become competitive, stay in business and to provide jobs. 3.2. The new philosophy:

Improvement never stops. The system is capricious, erratic, it will affect people in different ways from one month to another. Which is why HP need continuous improvement, it can never finish as change never finishes. The customer demands and tastes change very fast, and the competition in the market grows at a rapid rate today. Henry Ward Beecher (1976) said “Philosophy of one century is the common sense of the next”; we have to accept new philosophies according to the market trends and technology revolutions. HP does not accept delays, mistakes, defective materials and defective workmanship. The company does not accept today, the levels of error that could be tolerated yesterday. HP fully understands that defective products and services are a cost to the system. This explains why the number of defective HP laptops returned have been going down for the past years. 3.3. Cease dependence on mass inspection:

Eliminate the dependence on inspection to achieve quality says Deming. HP eliminates the need for inspection on a mass basis by building quality into the product in the first place. They say can’t inspect quality in, yet we have organisations like HP using ISO and audits as a means to prove quality. Routine inspection is the same as planning for defects, acknowledging that the process isn’t correct, or that the specifications made no sense in the first place. Inspection is too late as well as ineffective and costly. HP clearly understands that quality does not come from inspection, but from improvement of the process. If the process is improved so that defects aren’t produced in the first place, this in turn eliminates the need for inspection on a mass basis. 3.4. End lowest tender contracts:

HP is advised to end the practice of awarding business on the basis of price tag along. Instead, they have to focus on minimizing total cost. HP has to move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. Without adequate measures of quality, business drifts to the lowest bidder, therefore the result is low quality and high cost. Price has no meaning without measure of the quality purchased. 3.5. Improve every process:

HP is always in the process of improving constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. By using the latest production machines coupled with the advances in technology, HP is constantly improving the production and service system to improve quality and productivity, thus decreasing costs. HP institutes innovation at the workplace. Everyone working for HP should search continually for problems in order to improve every activity in the company, to improve quality and productivity and thus to constantly decrease costs. Finding what’s wrong is not improvement. Plugging leaks is not improvement. Everyone is told not to look at outcomes or defects, instead look at what produces the defects. Now the HP Management works continually on the system (for example work design, incoming work, improvement of tools, supervision, training and retraining). There in no stopping point in the process of quality management. The enterprise system and services must keep growing indefinitely in order to catch up with the competitive market.

3.6. Institute training on the job:
HP provides learning and development at their workplace so that all the employees know what they are supposed to do and how they should do it. HP understands that people learn in different ways. Training must be totally reconstructed. When training, people need to understand what the job is and why it is being done. Training must be done on the job, learning by doing; going into the work and experimenting with work methods and new ideas, studying the results, and striving for perfection. A trained worker has more productivity and quality than an untrained one, so giving training sessions will drastically improve the quality of the person, and also directly helps in better performance with regard to product quality. New skills are required to keep up with changes in tools, methods, techniques, product and service design. 3.7. Institute leadership of people:

The aim of management should be to help people to do a better job. Management is in need of overhaul. Leadership is required not supervision. Leadership is in need of overhaul, the job of leaders is to help people. At HP management focuses on assisting the employee do his/her job best. Improvement of quality will automatically improve productivity. Management at HP ensures that investigation and actions are taken on reports of inherited defects, system conditions, poor tools, fuzzy operational definitions, variation and all conditions detrimental to quality. The basic principle is that it’s the manager’s job to coach their staff and improve the system Firstly, they spend time in the work reinforcing the organisations commitment to its customers and to quality. Secondly, they devote time to ensuring the staff doing the work have everything they need to be able to serve the customer. Thirdly, when they have a decision to make about either of the above they get data to base their decisions on. There is no knee jerk, instead they get knowledge (Anon, 2001).

3.8. Drive out fear:
HP needs to build trust in its employees by extinguishing fear so everyone may work effectively for the organisation. Cooperation and collaboration requires a whole different set of values and relationships than that used in the outdated command and control method. People are afraid of change, any attempt to make things better will lead to a fear of the unknown. Many organisations are run by fear; fear of not getting their bonus, being afraid that they can’t meet their annual rating, or fear that they will be low on rating ladders. To achieve better quality people need to feel secure. HP needs to eliminate fear so that everyone may work effectively for the company. Fear will disappear as management improves and as employees develop confidence in management. Driving our fear is part of at least 8 of the 14 points.

3.9. Break down barriers:
HP has broken down barriers between departments. People in research, design, sales, technology and production work as a team. In other words, HP has built an integrated system of itself. Traditionally each silo/department becomes independent kingdoms, each trying to maximise their own figures. People in research, design, sales, technology and production work as a team at HP to be able to foresee any production problems, and potential product or service issues. Unless staff work jointly in a spirit of co-operation, each area will try to do what is best for itself, rather than whats good for the organisation. It means cooperation not competition, everybody wins if the system wins. 3.10. Eliminate exhortations:

HP should eliminate slogans, warnings and targets for the work force asking for zero defects, doing it right first time and new levels of productivity. Such urging only creates hostile relationships. Posters ask people to do what they can not do. Posters and slogans on the wall stating “do it right first time”; who can do it right first time, when what someone has to work on is already wrong? The causes go beyond the power of the work force, as the majority of low quality and low productivity causes result from the system. If the system has been built around quality, then it will be done right first time, so the slogan will be meaningless. 3.11. Eliminate arbitrary numerical targets:

HP should eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. The responsibility of management must be changed from sheer numbers to quality. 3.12. Permit pride of workmanship:

HP removes barriers that rob workers and people in management of their right to having pride in their work. This means, for example, abolishment of the annual or merit rating and of management by objective. Remove the obstacles and barriers that deprive workers, and people in management, of their right to take pride and joy in their work. This implies abolition of the annual merit rating (appraisal of performance) and of Management by Objective, all of which creates conflict and competition. 3.13. Encourage education:

HP institutes a vigorous program of education and encourage self improvement for everyone. What HP needs is not just good people; it needs people that are improving with education. Education may not be in a subject that is connected to their work. Self improvement keeps people’s minds developing. Point 6 is training for the job, point 13 is elevating people’s minds. Advances in competitive position will have their roots in knowledge. No organisation can survive with just good people, they need people that are improving. 3.14. Top management commitment and action:

HP is encouraged to put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job. Develop a critical mass that will bring about the change; a critical mass including top management. Managers should devote time to ensuring the staff doing the work have everything they need to be able to serve the customer. They use data and real knowledge obtained from the customer’s point of view to make decisions.

4.0 Advantages of Deming’s 14 points
* Provides a systematic and functional logic, which identifies stages in quality improvement. * Stresses that management comes before technology
* Leadership and motivation are recognised as important. * Emphasises role of statistical and quantitative methods * Recognises the different contexts of Japan and North America 5.0 Disadvantages of Deming’s 14 points

* Action plan and methodological principles are sometimes vague * The approach to leadership and motivation is seen by some as diagnostic
Does not treat situations which are practical or coercive 6.0 Conclusion

In conclusion, this document analyzed Deming’s 14 points for HP company and suggested some measures that can be applied by HP in achieving Total Quality Management. HP has to create a structure in management who take an active part and who spend time in the work reinforcing the 14 points, and the organisation’s commitment to it’s customers and to quality. The document also looked at the history of the 14 points and the input by HP and ended by analyzing the advantages and disadvantages of Deming’s 14 points.

7.0 Reference
7.1 Books

W.Edwards Deming, 2000. Out of the Crisis. London, England: The MIT Press Cambridge, Massachusetts, Ch1, pp. 11-17, pp. 23-43. W.Edward Deming, 1994. The New Economics. United States of America:Cambridge, Mass, MIT, Center for Advance Educational Services, Ch5&Ch6, pp116-121 Mary Walton, 1985. The Deming Management Method, United States of America:Carol Estornell, Ch3, pp33-38. William Edwards Deming, 1950. Some Theory of Sampling, United States of America: Dover Publications, Inc, Ch2, pp23-32 Wiley Classics Lilrary, 1976. Deming Sample Design in Business Research, Canada:John Wiley & Son, Inc,Stanley N. Deming & Stephen L. Morgan, 1993. Experimental design: a chemometric approach, Netherlands: Elservier Science Publishers B.V. 7.2 Online

Anon, 2001, Deming 14 Points Plan [Online], available from http://www.1000advices.com/guru/quality_tqm_14points_deming.html Accessed [5 August 2012] HCi home, 2010, Deming 14 Points [Online], Available fromhttp://www.hci.com.au/hcisite2/articles/deming.htm [5 August 2012] Quality Tools, 2004 [Online], Available from http://asq.org/learn-about-quality/project-planning-tools/overview/pdca-cycle.html [6August 2012] Leadership Institute inc, 2006, Dr.W. Edwards Deming [Online], Available fromhttp://www.lii.net/deming.html [5 August 2012] Curious Cat Management Improvement Library-Dictionary, 1990 [Online], Availablefrom http://curiouscat.com/management/demings14points.cfm [16 August 2012]