The Comparison of the Deming Prize and the Baldrige Award

1. The Comparison of the Deming Prize and the Baldrige Award - Handouts -

2. The Deming Prize The Deming Prize is Japan’s national quality award for industry. It was established in 1951 by the Japanese Union of Scientists and engineers (JUSE) and it was named after W. Edwards Deming. He brought statistical quality control methodology to Japan after W.W.II. The Deming Prize is the world’s oldest and most prestigious of such awards. Its principles are a national competition to seek out and commend those organizations making the greatest strides each year in quality, or more specifically, TQC. The prize has three award categories. They are Individual person, the Deming Application Prizes, and the Quality Control Award for factory. The Deming Application prizes are awarded to private or public organizations and are subdivided into small enterprises, divisions of large corporations, and overseas companies. There are 143 companies who won the prize. Among them, only once has the Deming Prize been awarded to a non-Japanese company: Florida Power and Light in 1989.

3. Baldrige Award The Baldrige Award was established in 1987 to promote quality awareness, understand the requirements for quality excellence, and share information about successful quality strategies and benefits. There are three eligibility categories: manufacturing, services, and small firms. Unlike the Deming Prize, public or not-for-profit organizations are not qualified. Also, there is no category in which all applicants that satisfy a given level of performance receive a quality prize. Since its foundation, there are only five companies who received this prize. According to its principles, the role of quality data collection and analysis as the basis for managerial decisions is paramount. Furthermore, quality efforts should not concentrate only on the elimination of defects but also encompass creative activities that will influence customer satisfaction. Among Baldrige winners, there are no service companies.

4. Check list of application for Deming Award - Policy • Policies pursued for management quality, and quality control • Method of establishing policies • Justifiability and consistency of policies • Utilization of statistical methods • Transmission and diffusion of policies • Review of policies and the results achieved • Relationship between policies and long- and short-term planning

5. Check list of application for Deming Award - Organization and its Management • Explicitness of the scopes of authority and responsibility • Appropriateness of delegations of authority • Interdivisional cooperation • Committees and their activities • Utilization of staff • Utilization of QC Circle activities • Quality control diagnosis

6. Check list of application for Deming Award - Education and Dissemination • Education programs and results • Quality- and control-consciousness, degrees of understanding of quality control • Teaching of statistical concepts and methods, and the extent of their dissemination • Grasp of the effectiveness of quality control • Education of related company (particularly those in the same group, sub-contractors, consigness, and distributers) • QC circle activities • System of suggesting ways of improvements and its actual conditions

7. Check list of application for Deming Award - Collection, Dissemination and Use of Information of Quality • Collection of external information • Transmission of information between divisions • Speed of information transmission (use of computers) • 4. Data processing statistical analysis of information and utilization of the results

8. Check list of application for Deming Award - Analysis • Selection of key problems and themes • Propriety of the analytical approach • Utilization of statistical methods • Linkage with proper technology • Quality analysis, process analysis • Utilization of analytical results • Assertiveness of improvement suggestions

9. Check list of application for Deming Award - Standardization • Systematization of standards • Method of establishing, revising, and abolishing standards • Outcome of the establishment, revision, or abolition of standards • Contents of the standards • Utilization of statistical methods • Accumulation of technology • Utilization of standards

10. Check list of application for Deming Award - Control • Systems for the control of quality and such related matters as cost and quantity • Control items and control points • Utilization of such statistical control methods as control charts and other statistical concepts • Contribution to performance of QC circle activities • Actual conditions of control activities • State of maters under control

11. Check list of application for Deming Award - Quality Assurance • Procedure for the development of new products and services (analysis and upgrading of quality, checking of design, reliability, and other properties) • Safety and immunity from product liability • Customer satisfaction • Process design, process analysis, and process control and improvement • Process capability • Instrumentation, gauging, testing, and inspecting • Equipment maintenance, and control of subcontracting, purchasing, and services • Quality assurance system and its audit • Utilization of statistical methods • Evaluation and audit of quality • Actual state of quality assurance

12. Check list of application for Deming Award - Results • Measurements of results • Substantive results in quality, services, delivery time, cost, profits, safety, environments, etc. • Intangible results • Measures for overcoming defects

13. Check list of application for Deming Award - Planning for the Future • Grasp of the present state of affairs and the concreteness of the plan • Measures for overcoming defects • Plans for further advances • Linkage with the long-term plans

14. Check list of application for Malcom Baldrige National Quality Award

15. Check list of application for Malcom Baldrige National Quality Award, 2

16. Check list of application for Malcom Baldrige National Quality Award, 3

17. Check list of application for Malcom Baldrige National Quality Award, 4

18. Eight Critical Factors • A plan to keep improving all operations continuously • A system for measuring these improvements accurately • A strategic plan based on benchmarks that compare the company’s performance with the world’s best • A close partnership with suppliers and customers that feeds improvements back into operations • A deep understanding of the customers so that their wants can be translated into products • A long-lasting relationship with customers, going beyond the delivery of the product to include sales, service, and ease of maintenance • A focus on preventing mistakes rather than merely correcting them • A commitment to improving quality that runs from the top of the organization to the bottom

19. Comparison of the Deming Prize and Baldrige Award

20. Comparison of the Deming Prize and Baldrige Award, 2

21. Comparison of the Deming Prize and Baldrige Award, 3

22. Comparison of the Deming Prize and Baldrige Award, 4

23. Comparison of the Deming Prize and Baldrige Award, 5

24. Comparison of the Deming Prize and Baldrige Award, 6

25. Comparison of the Deming Prize and Baldrige Award, 7

26. Comparison of the Deming Prize and Baldrige Award, 8

27. Comparison of the Deming Prize and Baldrige Award, 9

28. THE 2001 MALCOLM BALDRIGE NATIONAL QUALITY AWARD REGIONAL CONFERENCES Executives from many of the Award recipient organizations will share their knowledge and insights to help you improve your organization’s quality efforts The 2000 Award Recipients: Award Recipients will be announced in mid-November 2000, and the recipients will participate in the 2001 Regional Conferences. The recipients could include, for the first time, education and health care organizations.

29. THE 2001 MALCOLM BALDRIGE NATIONAL QUALITY AWARD REGIONAL CONFERENCES, 2

30. Motorola (1998) • In the past five years, Motorola has reduced its defect rate in manufacturing 99.5%, generating cost savings estimated at about $900 million this year, and $3.1 billion cumulatively. • Motorola’s prices fall an average of 8-12 percent a year; it’s cellular phone prices 25% a year. • “Minority report program”. Employees can file a report if they feel that their ideas are not being supported. An example is the concept behind the microprocessor 68000 series which later became the brains of Apple’s Macintosh line. • In 1987, Motorola announced two productivity goals: to reduce manufacturing defects by 90% every two years, and reduce cycle (new product development) time by 90% every five years.

31. Eastman Chemical Company • Eastman is well accepted by its surrounding communities and has a strong environmental record. Safety serves as a driving force. The company earned inclusion in OSHA’s voluntary Star Program. • Eastman averaged 22 % of sales from new products commercialized within the last five years, compared to an average of 11% for 13 leading chemical companies, twice the average in a recent study. • Eastman has adopted a no-fault return policy on its plastic products and states a customer may return any product for any reason. This policy is believed to be the only one of its kind in the chemical industry. • Over the past four years, more than 70% of Eastman’s worldwide customers rated Eastman their number one supplier. For the last seven years, Eastman has been rated outstanding in five important customer factors-product quality, product uniformity, supplier integrity, correct delivery, and reliability. Shipping reliability consistently has been near 100% for the last four years. • Eastman’s new product development practices are ranked second among a group of 13 leading chemical companies. • Eastman uses multiple approaches to drive continuous process improvement through an “interlocking team” structure that involves virtually every employee in the teaming and quality improvement process. • Data use is deployed widely, with virtually all employees using data to track their individual and/or their team’s performance. • Eastman has a fully integrated planning process that systematically deploys the key business priorities to all employees and all work groups throughout Eastman’s innovative four-dimensional organizational structure.

32. Quality Achievements

33. Ames • Every teammate at Ames is a member of at least one “involvement group” dedicated to quality improvement. The company currently has 40 of these groups. • The percentage of defective parts reaching customers is among the lowest in the industry. For Ames’ largest customer, the defect rate has been reduced since 1989 from more than 30,000 parts per million to 11. • Productivity, as measured by sales per employee, increased by 48% from 1987 to 1992. • Over the past five years, teammate ideas have saved the company and its customers more than $3 million and will average over $2,700 per teammate in 1993. • Ames product warranties are among the best in the industry and include a comprehensive warranty for prototypes, which refunds development costs if specifications are not achieved. • Ames has developed a consolidated supplier base be selecting suppliers who share the company’s quality values and are responsive to its established “continuous improvement” goals. Down from 42 key suppliers in 1989, Ames Rubber Corp. now relies on 19 suppliers whose quality performance is about 99%.

34. Impact of Quality Improvement on Business Performance Source: Adapted from U.S. General Accounting Office, Management Practices: U.S. Companies Improve Performance Through Quality Efforts, Washington, 1991, pp. 18-28. SPRING 1993

35. Result • Increased Customer Satisfaction • Lower Costs • Reduced Product Development Time • Increased Employee Satisfaction • Higher Quality Products • Innovation • Increased Productivity

36. Sue Rohan, David Luthy Education Pilot Program Overview

37. Sue Rohan, David Luthy Education Pilot Program Overview