The Real Lessons of the Red Bead Factory

By John Hunter, founder of

YouTube video

The video shows a recorded webinar for the Healthcare Value Network by Mark Graban and Mike Stoecklein. In the video they explore the real lessons of Dr. Deming’s famous red bead factory demonstration and the principle of understanding and managing variation.

Mark mentions how Bill Boller, with Hewlett-Packard, created the red bead experiment as a present for Dr. Deming in 1982. Dr. Deming then used it on the first day of his 4 day seminars. And throughout the rest of the seminar he would refer back to the red bead game to emphasis points he wanted to make.


He [Dr. Deming in seminars] would say it must be because of good management that we went from 64 to 62, so clearly we are on the right track. He was articulating what was going on in the minds of people with the prevailing style of management. And he called it the mythology of management – how we think because the the things we do it has a cause and effect on the what we see.

In the red bead experiment people could clearly see that the variation in the data were not due to causes that Dr. Deming mentioned. And in seeing that they can understand that just because you see variation in data that doesn’t mean you can identify causes – often there is no cause it is just variation (also see the Dangers of Forgetting the Proxy Nature of Data).

Mark showed how variation can mislead and referenced a simulation the BBC did and wrote about in: Can chance make you a killer?

Mike quotes Ed Baker (at Ford) on seeing that when effort was being made to apply the ideas that grow from an understanding of variation was only being applied on the factor floor:

Where it needs to be applied is understanding variation as it relates to the overall business strategy or company-wide systems.

In several previous posts on our blog we have discussed that topic, including: Don’t Limit Improvements to Low Level Process Improvement.

This video is another in the continually growing number of webcasts for those learning about Deming’s management ideas. Many of these are provided by The W. Edwards Deming Institute itself but there are also more, like this one, that are made available by others. And there are many that may not directly mention Deming but discuss aspects of related ideas, especially lean thinking. Those seeking to learn are lucky to have so many resources on Deming’s ideas readily available online.

Related: We are Here to Learn, to Make a Difference and to Have FunLessons From the Red Bead Experiment with Dr. DemingWe Need to Understand Variation to Manage Effectively

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