Tom Lubnau: Wyomingite Changed Japanese Economy, Saved U.S. Car Industry

Columnist Tom Lubnau writes, "Powell's W. Edwards Deming was one of the great business thinkers of the twentieth century. He developed a business process which known as Total Quality Management which changed the Japanese economy and saved the U.S. car industry."

Tom Lubnau

April 10, 20245 min read

Lubnau head 2
(Cowboy State Daily Staff)

W. Edwards Deming was born in Iowa, and then raised on his family’s farm near Powell, Wyoming. He received his BS degree in electrical engineering from the University of Wyoming at Laramie, an MS degree from the University of Colorado, and a PhD from Yale University. 

Deming became one of the great business thinkers of the twentieth century. 

He developed a business process which ultimately became known as Total Quality Management (although he did not coin the term).  

Deming’s process involved constant evaluation of processes to determine where improvements could be made, to make the processes more consistent and more efficient. 

Essentially, the process championed by Deming applied statistical analysis to processes to evaluate the process to increase quality.

Business in the United States was slow to adopt Deming’s ideas. 

But Demings’ concepts were embraced by the Japanese starting after World War II.  Japanese industry, even as late as the 1960’s was known for cheap and inefficient products.  

That all changed, due largely to Deming.  (Deming was awarded Japan’s Order of the Sacred Treasure, Second Class for his contributions to the rebirth of Japan.)

By the 1980’s, the Japanese automobile industry was out competing, out selling and out producing the big three United States automobile dealers. 

The unwillingness for the automobile industry to adopt Deming's total quality improvement process earlier resulted in an upheaval in the automobile industry the results of which we still see today.

By 1981, Ford Motor Company hired Deming as a consultant. Deming evaluated Ford’s processes and their management.   He recommended changes, based on his statistical analysis, in management processes and assembly line construction.  

The results were amazing.  Ford went from a $3 billion dollar loss to having a profitable, reliable and quality product line in a few short years.  

Deming’s processes help to create reliable, improving and profitable products.   Suddenly, a management philosophy which had largely been rejected by United States industry, was the industry buzz word.   Industries as diverse as health care, manufacturing, sales and travel embraced the TQM model.

Deming summarized his model in 14 points.  [1]

1. Create constancy of purpose toward improvement of product and service.

2. Adopt the new philosophy.

3. Cease dependence on inspections.

4. Use a single supplier for any one item.

5. Improve constantly.

6. Institute on-the-job training.

7. Institute leadership.

8. Eliminate fear.

9. Break down barriers between departments.

10. Eliminate slogans, exhortations, and targets.

12. Remove barriers to pride of workmanship.

13. Institute education and self-improvement programs.

14. Make transformation everyone’s job.

The health care industry, for example, has embraced the TQM model.   Hospital cases are evaluated, and the results graded.   If “never events” occur, the process, the physician and the employees are all evaluated.   Root cause analysis is conducted.   The industry looks for ways to make healthcare safer, more efficient and more reliable with every case.   The sum of all cases is also evaluated, and processes improved.

Complacency and arrogance of American industry gave the Japanese a leg up in the automobile industry, the electronics industry and other manufacturing industries.   One can’t help but wonder if there are other current functions of government which could use a shove toward a statistically based total quality management system?

In a free market economy, if one sells unreliable overly expensive products, one goes out of business.  Government functions continue, unabated, until something forces a change.  With many government functions, we are doing things the same way they were done 100 years ago.  

Imagine a government management philosophy, not based on the trendy political buzzwords, but on constant quality improvement following Deming's 14 points. 

Adopting a model of government services based on constant change and improvement would be a difficult lift.   Moving the bureaucratic inertia away from the way “we’ve always done it” into a system of “let’s do it the right way” is a difficult task that would require inspired leadership at all levels. 

Adopting TQM for government services is not an encouraging  prospect. Adoption entails a cultural change, commitment to the process and a vision on long-term results.   Given the policy makers survive from election to election, the political will to improve might not be possible.

The only thing that will trigger change might be a Japanese competition type event. By then, it may be too late to adopt proven techniques.

But it would be exciting if Wyoming government could adopt the philosophies of a Wyoming boy made good for the benefit of us all.


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Tom Lubnau