All that we learned about the 14 points and the diseases of management applies to service organizations, as well as manufacturing. In this chapter we focus on service organizations.
A system of quality improvement is helpful to anyone that turns out a product or is engaged in service, or in research, and wishes to improve the quality of his work, and at the same time to increase his output, all with less labor and at reduced cost. Service needs improvement along with manufacturing.
The principles and methods for improvement are the same for service as for manufacturing. The actual application differs, of course, from one product to another, and from one type of service to another
W. Edwards Deming, Out of the Crisis, page 183
For some reason some people think Dr. Deming only talked about quality improvement on the factory floor. That isn’t at all accurate. Even in talking to manufacturing companies most of his effort was focused on changing the behavior, thinking and processes in the executive suite not the factory floor. He did also focus on improvements on the factory floor but it was always in the context of the entire company including many areas for improvement that were like other service or knowledge work (sales, purchasing, customer research, accounting, education, managing people, research and development, training, customer service, etc.).
While great strides were made at companies like Toyota and Ford (both on the factory floor, in the executive suite and in many non-factory floor areas of the companies) there was also great work at many organizations that were not manufacturers. Chapter 7 of Out of the Crisis specifically discusses examples from service companies: banking, insurance, government, electric utility, railway, telephone company, municipal transit system, hotel, postal service, airlines, restaurant, etc..
I do find that some of the service examples show the age of the book. It is amazing the thrust of the book is just as relevant today as when Deming wrote it. The management ideas have aged very well.
Sadly the problems with existing management mentioned throughout his books are also stubbornly prevalent today. It seems to me a great deal of good thinking on process improvement has been adopted by a fair number of companies. And there is a much greater use of quality tools and thinking today. There is a much better, though still very inadequate, appreciation for systems thinking and understanding the need to fix the management system in order to fix persistent problems.
The successful improvement on the factory floor seems to show the greatest improvement over the last 50 years, in my opinion. In the last 10-15 years there has been a great deal of good work in health care and software development. And there have been great efforts in hundreds of organizations across most any industry I can think of.
There is still plenty of room for improvement on the factory floor, in health care, software and everywhere else. Unfortunately, the room for improvement in the executive suite is nearly as great as it was when Dr. Deming first focused on addressing the need for transforming the management of our organizations.
Related: Dr. Deming’s Ideas Applied in High School Education – Free, Perfect, and Now by Robert Rodin – Fewer Patients-In-Process and Less Safety Scheduling; Incoming Supplies are Secondary – Deming and Software Development