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The Deming Prize Guide How was the
Deming Prize Established? Upon his visit, Dr. Deming lectured day after day his “Eight-Day Course on Quality Control” at the Auditorium of the Japan Medical Association in Kanda-Surugadai, Tokyo. This was followed by Dr. Deming’s “One-Day Course on Quality Control for Top Management,” held in Hakone. Through these seminars, Dr. Deming taught the basics of statistical quality control plainly and thoroughly to executives, managers, engineers and researchers of Japanese industry. His teachings made a deep impression on the participants’ mind and provided great impetus to quality control in Japan, which was in its infancy. The transcript of the eight-day course, “Dr. Deming’s Lectures on Statistical Control of Quality,” was compiled from stenographic records and distributed for a charge. Dr. Deming donated his royalties to JUSE. In appreciation of Dr. Deming’s generosity, the late Mr. Kenichi Koyanagi, managing director of JUSE, proposed using it to fund a prize to commemorate Dr. Deming’s contribution and friendship in a lasting way and to promote the continued development of quality control in Japan. Upon receiving the proposal, the JUSE's board of directors unanimously made a resolution to establish the Deming Prize. Later, the Japanese translation of Dr. Deming’s
book Some Theory of Sampling was published. Dr. Deming further contributed
to the fund using the royalties from his book. Since then, the Deming
Prize has grown considerably, and today JUSE carries the overall administrative
costs for the prize.
Definition of TQM
(Total Quality Management) (revised in June 1998) 2. “Carried out by the entire organization to effectively and efficiently achieve” means to involve everyone at all levels and all parts of the company so as to achieve the business objectives speedily and efficiently with the least management resources. This is accomplished through an appropriate management system that has a quality assurance system at its core, and it integrates other cross-functional management systems such as cost, delivery, environment and safety. The respect for humanity value encourages the company to develop human resources which uphold its core technology, speediness and vitality. The company maintains and improves its processes and operations, and uses appropriate statistical techniques and other tools. Based on facts, the company manages its business by rotating the management cycle of PDCA (plan, do, check and act). The company also rebuilds its management system by utilizing appropriate scientific methods and information technology. 3. “Company objectives” refer to securing appropriate profit for the long term through satisfying customers consistently and continuously. Also, they encompass improving the benefit to all stakeholders including employees, society, suppliers and stockholders 4. “Provide” refers to activities from producing “products and services” to handing them off to customers, including surveys, research, planning, development, design, product preparation, purchasing, manufacturing, installation, inspection, order-taking, sales and marketing, maintenance, after-sales services and after-usage disposal and recycling. 5. “Products and services” include manufactured products (finished products and parts and materials), systems, software, energy, information and all other benefits that are provided to customers. 6. “Quality” refers to usefulness (both functional and psychological), reliability and safety. Also in defining quality, influence on the third parties, society, the environment and future generations must be considered. 7. “Customers” include buyers but also users, consumers and beneficiaries.
The Deming Prize
and Development of Quality Control / Management in Japan Commonly, those who have challenged for the Prize share the feeling that they have had a valuable experience and that the management principle of achieving a business success through quality improvement has really worked. Through witnessing the success of these organizations, many other companies have been inspired to begin their own quest for quality management. Learning from those who went before them, the new practitioners are convinced that quality management is an important key to their business success and that the challenge to attain the Prize can provide an excellent opportunity to learn useful quality methodologies. Thus, quality management has spread to many organizations, its methods have evolved over the years and the methods contributed to the advancement of these organizations’ improvement activities. This mechanism that encourages each organization’s self-development comes from the examination process of the Deming Prize, though the very process has invited some criticism that the marking criteria for the Deming Application Prize is unclear. To make the examination process more transparent and to communicate the intentions of the Deming Prize more clearly, the evaluation criteria and the judgment criteria for passing are now presented. However, the Committee’s basic stance on the examination criteria remains unchanged. Namely, the criteria should reflect each applicant organization’s circumstance. The Deming Prize examination does not require applicants to conform to a model provided by the Deming Prize Committee. Rather, the applicants are expected to understand their current situation, establish their own themes and objectives and improve and transform themselves company-wide. Not only the results achieved and the processes used, but also the effectiveness expected in the future are subjects for the examination. To the best of their abilities, the examiners evaluate whether or not the themes established by the applicants were commensurate to their situation; whether or not their activities were suitable to their circumstance and whether or not their activities are likely to achieve their higher objectives in the future. The Deming Prize Committee views the examination process as an opportunity for “mutual-development,” rather than “examination.” While in realty the applicants still receive the examination by a third party, the examiners’ approach to evaluation and judgment is comprehensive. Every factor such as the applicants’ attitude toward executing Total Quality Management (TQM), their implementation status and the resulting effects are taken into overall consideration. In other words, the Deming Prize Committee does not specify what issues the applicants must address, rather the applicants themselves are responsible for identifying and addressing such issues, thus, this process allows quality methodologies to be further developed. Total Quality Control (TQC) that had been developed in Japan as discussed above was re-imported to the United States in the 1980s and contributed to the revitalization of its industries. While the term TQC had been used in Japan, it was translated as TQM in western nations. To follow an internationally-accepted practice, Japan changed the name from TQC to TQM. There is no easy success at this time of constant change. No organization can expect to build excellent quality and management systems just by solving problems given by others. They need to think on their own, set lofty goals and drive themselves to challenge for achieving those goals. For these companies that introduce and implement TQM in this manner, the Deming Application Prize aims to be used as a tool for improving and transforming their business management. Structure
and Roles of the Deming Prize Committee
1. Deming Prize for Individuals 1.1 What is the Deming Prize for Individuals? The Deming Prize for Individuals is an annual award given to:
To apply for the Deming Prize for Individuals, recommendation from the members of the Deming Prize Committee will be necessary. Any individual who fulfils the above (1) or (2) may apply for the Prize regardless of nationality. However, those whose activities are limited to outside Japan are not eligible for application. 1.2 How to recommend or apply for the Deming Prize for
Individuals—Due date: July 31st* The recommendation/application deadline is July 31st. 1.3 Examination There is no difference in the examination process regardless if the candidates have been recommended by others or self-applied. When recommended by others, the candidate may be asked to submit the records of his/her achievement. The Deming Prize for Individuals Subcommittee examines and selects the candidates for the Prize and reports to the Deming Prize Committee. 1.4 Determination of the winners—Mid October According to the report by the Subcommittee, the Deming Prize Committee determines the winners of the Prize and notifies them. 1.5 Public announcement of the winners—Mid October After the Prize winners have been determined by the Deming Prize Committee as mentioned above, the winners are announced in the following publications and the reasons for receiving the Prize are stated: 1) The “Nippon Keizai Shimbun” (Japan Economic
Journal) 1.6 Award ceremony—Mid November The winners receive the Deming Medal with an accompanying Certificate of Merit from the Deming Prize Committee and supplemental prize money from “Nippon Keizai Shimbun.” 1.7 Report by prize winners—Mid November The winners’ report meeting follows the award
ceremony the next day. 2.1 What is the Deming Application Prize? The Deming Application Prize is an annual award presented to a company that has achieved distinctive performance improvements through the application of TQM. Regardless of the types of industries, any organization can apply for the Prize, be it public or private, large or small, or domestic or overseas. Provided that a division of a company manages its business autonomously, the division may apply for the Prize separately from the company. There is no limit to the number of potential recipients of the Prize each year. All organizations that score the passing points or higher upon examination will be awarded the Deming Application Prize. 2.2 Companies Qualified for Receiving the Prize The Deming Application Prize is given to applicant companies or divisions of companies (applicant companies hereafter) that effectively practice TQM suitable to their management principles, industry, business and scope. More specifically, the following evaluation criteria are used for the examination to determine whether or not the applicant companies should be awarded the Prize:
2.3 How to apply for the Deming Application Prize—Due date: January 15th The application form, which is provided at the end of this booklet, must be completed and submitted with necessary documents. The application deadline is January 15th. 2.4 Examination The Deming Application Prize Subcommittee examines and selects the candidates for the Prize. A document examination will be carried out based on the Description of TQM Practices submitted by the applicant company. If the applicant company passes the document examination, an on-site examination will be conducted. The Subcommittee makes judgment according to the evaluation criteria and reports the results to the Deming Prize Committee. The examination process is not open to the public, and all possible measures are taken to ensure the confidentiality of applicant companies. 2.5 Determination of the winners—Mid October According to the report by the Subcommittee, the Deming Prize Committee determines the winners of the Prize and notifies them. In the event that the applicant has not attained passing
points, final judgment is reserved and, unless the applicant requests
withdrawal, the status is considered as “continued examination.”
Subsequent examinations are limited to twice during the next three years. 2.7 Award ceremony—Mid November The winners receive the Deming Medal with an accompanying Certificate of Merit from the Deming Prize Committee. The winners also receive a written report on the examination findings (including recommendations for future improvement of their TQM activities.) 2.8 Best practices presentations by prize winners—Mid November The winners’ best practices presentations follow the award ceremony the next day. 2.9 Status Report and On-Site Review Three Years after Receiving the Prize The prize-winning company is requested to submit a short report on the status of its TQM practices three years after having received the prize. As a rule, an on-site review for about half-day will be conducted based on the report. In lieu of this review, the winning company may chose the following to further promote and develop its TQM: 1) To receive TQM Diagnosis by the Deming Prize Committee
Members. As for the details, please contact the Secretariat for the Deming Prize Committee. For more detailed information about the application procedures and the examination criteria, please refer to “The Deming Prize Application Guide”, can be downloaded on Deming Prize main page. 3. Quality Control Award for Operations Business Units 3.1 What is the Quality Control Award for Operations Business Units? The Quality Control Award for Operations Business Units
is given to operations business units of a company that have achieved
distinctive performance improvement through the application of quality
control/management in the pursuit of TQM in a designated year. 3.2 Application and examination processes, the same as the Deming Application Prize. The Deming Application Prize Subcommittee conducts the on-site examination for this award. The application and examination procedures for the Quality Control Award for Operations Business Units follow ones for the Deming Application Prize. Namely, these procedures include application, examination, prizewinner determination and announcement, award ceremony and reports by winners as well as the status report and on-site review three years after receiving the prize. Successful applicant operations business units will receive the Certificate of Merit and a Plaque at the award ceremony. 4. The Nikkei QC Literature Prize 4.1 What is the Nikkei QC Literature Prize? In 1954, the Nippon Keizai Shimbun (Japan Economic Journal) Company established the Nikkei QC Literature Prize. It awards excellent literature on the study of TQM or statistical methods used for TQM (including literature involving numerical tables and software) that are recognized to contribute to the progress and development of quality control/management. The Deming Prize Committee examines the candidates for the Prize and awards them annually as part of the Deming Prize event. 4.2 Eligibility for the Prize The Nikkei QC Literature Prize is given to the author(s) of the literature published in Japan as follows:
Note: The literature involving software is one, which
was published during the past three years and is excellent in wide-application,
effectiveness, uniqueness and availability. There is no difference in the examination process regardless if the candidates have been recommended by others or self-applied. The recommendation/application form, which is provided at the end of this booklet, must be completed and submitted. The recommendation/application deadline is July 31st. 4.4 Examination There is no difference in the examination process regardless if the candidates have been recommended by others or self-applied. The Nikkei QC Literature Subcommittee examines and selects the candidates for the Prize and reports to the Deming Prize Committee. 4.5 Determination of the winners—Mid October According to the report by the Subcommittee, the Deming Prize Committee determines the winners of the Prize and notifies them. 4.6 Public announcement of the winners—Mid October After the Prize winners have been determined by the Deming Prize Committee as mentioned above, the winners are announced in the following publications and the reasons for receiving the Prize is stated: 1) The monthly magazine “Quality Management”
(published by JUSE) The winners are also reported in newspapers. 4.7 Award ceremony—Mid November The winners receive the Certificate of Merit and supplemental
prize money from Nippon Keizai Shimbun. (2) Productivity Improvement/Cost Reduction (3) Expanded Sales (4) Increased Profits (5) Thorough Implementation of Management Plans/Business
Plans (6) Realization of Top Management's Dreams As quality control/management is disseminated throughout
the entire company, and as top management's policies are promptly communicated
to all levels of the company and achieved, plant managers, department
heads, section chiefs as well as supervisors improve their understanding
of business management. Moreover, their solidarity is strengthened and,
thus, it becomes possible to develop the next generation of executives
and managers. Some top managers have commented, "I have been president
for a long time and achieving my policies has never gone this well." "During the process leading up to the Deming Prize
examination, the company as a whole focused on improving product and service
quality, and the organizational constitution was strengthened. These efforts
have contributed to breaking down sectionalism, improving interdepartmental
communications, removing barriers between departments and instilling a
sense of unity. Every employee has learned to see things from the viewpoint
of the entire company and has become more confident in his/her job."
(8) Heightened Motivation to Manage and Improve as Well
as to Promote Standardization (9) Uniting Total Organizational Power and Enhancing
Morale Words from Top
Management "Just do it to accomplish it", is my motto. I often remind myself to just do it. My company received the Deming Application Prize in
1972 and the Japan Quality Medal in 1977 and 1990. Especially, the 1990
Quality Medal was a great pleasure, as I had assumed the chairman of the
promotion committee for our challenge to become a two-timer winner of
the Medal for the first time in its history.
Mr. C. Narasimhan, President,
Sundaram-Clayton Ltd. We have streamlined our daily activities through daily management with standard operating procedures (SOP) and "Genba" management. The daily management targets are deployed up to the supervisor level in the company through "Managing points and Checking points"(MPCP). Specific objectives for obtaining breakthrough results are established, deployed and reviewed company-wide through policy management process. Some of tangible and intangible benefits we achieved through TQM are:
We decided to challenge the Deming Prize to encourage our employees to achieve higher standards and also to motivate them. After successfully winning the Deming Prize in 1998, we continue to improve our performance namely: 100% employee participation in Quality Control Circles consecutively for the last two years and 100% participation in Suggestion (Teian) scheme during the last year. We have been certified for QS9000 quality systems in August 2000 and ISO14001 environmental management systems in August 2001. Deming Prize is not our destination and we believe that
it is only a ticket for TQM journey towards organizational excellence.
We have embarked further improvement in our performance: Improvement in
product quality, improving productivity and reducing cost through achieving
100 ppm quality, implementing lean manufacturing systems and Total Productive
Maintenance (TPM). It is useful to have a third party objectively diagnose the implementation status of TQM and provide recommendations so that the company can better understand where it stands and what it has to do to promote TQM more effectively. Established in 1971, the TQM Diagnosis, which is provided by the Deming Application Prize Subcommittee upon request of a company, aims to contribute to the further development of that company’s TQM. The TQM Diagnosis is not a preliminary Deming Application Prize examination. A company that receives the TQM Diagnosis cannot apply for the Deming Application Prize examination that same year. Furthermore, whether or not a company has received the QC Diagnosis has no influence or bearing whatsoever on the results of the Deming Prize examination. TQM Diagnosis Procedures The purpose of the TQM Diagnosis is to further advance the promotion and practice of effective TQM in companies under diagnosis. The TQM diagnosis and resulting guidance is provided from an objective viewpoint to companies at varying stages of TQM advancement as indicated below. Those companies that wish to receive the TQM Diagnosis must complete and submit the application form, which is provided at the end of this booklet, with necessary documents at least three months prior to the desired diagnosis dates. However, no diagnosis will be conducted during the Deming Prize examination period (early July to mid-October).
The Deming Application Prize Subcommittee conducts the
TQM Diagnosis. While the details of the diagnosis program will be determined
in consultation with the company, the methods and documents used for the
diagnosis follow those for the Deming Application Prize. As a rule, the
diagnosis will be based on the company's presentations, the on-site examination,
the document review and questions and answers. The results of the diagnosis
will be communicated through a report on the diagnosis findings after
the findings of all the examiners who conducted the diagnosis have been
compiled. Those companies that wish to receive the TQM Diagnosis should
contact the JUSE Secretariat for the Deming Prize Committee.
All inquiries about the Deming Prize should be directed
to the Secretariat for the Deming Prize Committee as follows:
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