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. Collection of external information
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
Maximum score
Percentage of sub-total
1.0     Leadership
15%
1.1       Leadership of top-ranking managers
1.2       Policy
1.3       Management control system and quality improvement process
1.4       Allocation and utilization of resources
1.5       Responsibility to society
1.6       Unique and creative leadership technique
2.0     Information and analysis
7.50%
2.1       Utilization of analysis technique or system
2.2       utilization of information about product quality and servicing quality
2.3       Customer data and analysis
2.4       Analysis of quality and data of subcontractor
2.5       Analysis of quality and data of distributor or sales agent
2.6       Employee-related data and analysis
2.7       Unique and innovative analysis of information

15. Check list of application for Malcom Baldrige National Quality Award, 2
3.0     Quality of strategy planning
7.50%
3.1       Operation target and strategy target
3.2       Function of planning
3.3       Quality improvement plan
3.4       Unique and innovative planning for strategy
4.0     Utilization of human resources
15%
4.1       Control and operation
4.2       Quality-consciousness and participation of employees
4.3       Training and education concerning quality
4.4       Personnel assessment, motivation, award system
4.5       Unique and innovative strategy concerning utilization of human resource

16. Check list of application for Malcom Baldrige National Quality Award, 3
5.0     Quality assurance of product and servicing
15%
5.1       Reflection of customer’s opinion on product and servicing
5.2       Development of new product and new servicing
5.3       Design of new product and new servicing
5.4       measurement, standardization, data system
5.5       Engineering
5.6       Audit
5.7       Recording
5.8       Safety, health and sanitation, environment
5.9       Assurance/effectiveness
5.10    Unique and innovative approach to quality assurance of product and servicing 10

17. Check list of application for Malcom Baldrige National Quality Award, 4
6.0     Result of quality assurance of product and servicing
10%
6.1       Reliability and achievement of product and servicing
6.2       Reduction of scrap, rework, rejection concerning product and servicing
6.3       Reduction of complaint and claim suit concerning quality
6.4       Reduction of assurance- or site-related assistance operation
6.5       Innovative index and economic gain for quality improvement
7.0     Customer satisfaction
30%
7.1       Quality of product and servicing from customer’s viewpoint
7.2       Comparison of competitiveness of product and servicing
7.3       Customer servicing and countermeasure for complaint
7.4       Assurance from customer’s viewpoint
7.5       Unique (or innovative) technique to grasp customer satisfaction
Total
100%

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
Topic
Baldrige Award
Deming Prize
Definition of Quality
“customer-driven quality” it views quality as defined by the customer
“conformance to specifications” it views quality as defined by the producers
Primary Focus
customer satisfaction and quality
statistical quality control
Overall Approach
quality of management
management of quality
Purpose
promote competitiveness through total quality management
promote quality assurance through statistical techniques
Types of Organization
manufacturing, service and small business
essentially private or public manufacturing
Orientation
60% result, 40% process
60% process, 40% results
Scoring Weight
different weight for each criteria
equal weight in 10 criteria
Consideration
less concern
concern in productivity, delivery, safety, and environment
Information Management
heavily concern
Continuous of the award
N/A
Japan Quality Control Medal
Winners
Maximum of two per category
All firms meeting standard
Scope
U.S. firms only
Firms for any country
Applications
$2500 and 75 pages packet
1000 pages and one year working with consultant from the union of Japanese Scientist & Engineers
Grading time
six months
one year
First Award
1987
1951
Sponsor
National Institutes Standards and Technology
Union of Japanese Scientists and Engineers

20. Comparison of the Deming Prize and Baldrige Award, 2
Topic
Baldrige Award
Deming Prize
Grading Criteria
1.      Leadership
1.      Policy and Objectives
§         of top-ranking managers
§         pursued for management quality & QC
§         policy
§         method of establishing quality
§         management control system & quality improvement process
§         justifiability and consistency of policies
§         allocation and utilization of resources
§         review of policies and the result achieved
§         responsibility to society
§         relationship between policies and long term & short term planning
§         unique and creative leadership technique

21. Comparison of the Deming Prize and Baldrige Award, 3
Topic
Baldrige Award
Deming Prize
Grading Criteria
2.      Information and Analysis
2.      Organization and its Management
§         utilization of analysis technique or system
§         explicitness of the scopes of authority and responsibility
§         utilization of information about product quality and servicing quality
§         interdivisional cooperation
§         customer data and analysis
§         committees and their activities
§         analysis of quality and data of subcontractor and distributor or sales agent
§         utilization of staff
§         utilization of QC Circle activities
§         QC diagnosis

22. Comparison of the Deming Prize and Baldrige Award, 4
Topic
Baldrige Award
Deming Prize
Grading Criteria
3.      Quality of Strategy Planning
3.      Education and dissemination
§         operation target and strategy target
§         education program and results
§         function of planning
§         degrees of understanding of QC
§         quality improvement plan
§         teaching of statistical concepts and methods
§         unique and innovative planning for strategy
§         grasp of the effectiveness of QC
§         QC circle activities
§         system of suggesting ways of improvements and its actual conditions

23. Comparison of the Deming Prize and Baldrige Award, 5
Topic
Baldrige Award
Deming Prize
Grading Criteria
4.      Utilization of Human Resource
4.      Collection, Dissemination and Use of Information on Quality
§         control and operation
§         collection of external information
§         quality consciousness and participation of employees
§         transmission of information between divisions
§         training and education concerning quality
§         speed of information transmission
§         personnel assessment, motivation, award system
§         data processing, statistical analysis of information and utilization of the results
§         innovative strategy concerning utilization of human resource

24. Comparison of the Deming Prize and Baldrige Award, 6
Topic
Baldrige Award
Deming Prize
Grading Criteria
5.      Quality Assurance of Product and Servicing
5.      Analysis
§         reflection of customer’s opinion on product and servicing
§         selection of key problems and themes
§         design and development of new product and new servicing
§         propriety of the analytical approach
§         measurement, standardization, data system
§         utilization of statistical methods
§         engineering, audit, recording
§         linkage with proper technology
§         safety, health and sanitation, ,environment
§         quality analysis, process analysis
§         approach to quality assurance of product and servicing
§         utilization of analytical results
§         assertiveness of improvement suggestions

25. Comparison of the Deming Prize and Baldrige Award, 7
Topic
Baldrige Award
Deming Prize
Grading Criteria
6.      Result of Quality Assurance of Product and Servicing
6.      Standardization
§         reliability and achievement of product and servicing
§         systematization of standards
§         reduction of scrap, rework, rejection, concerning product and servicing
§         method of establishing, revising, and abolishing standards and their outcome
§         reduction of complaint and claim suit concerning quality
§         utilization of statistical methods
§         innovative index and economic gain for quality improvement
§         contents of the standards
§         accumulation of technology
§         utilization of standards

26. Comparison of the Deming Prize and Baldrige Award, 8
Topic
Baldrige Award
Deming Prize
Grading Criteria
7.      Customer Satisfaction
7.      Control
§         quality of product and servicing from customer’s viewpoint
§         system for the control of quality and related matters
§         comparison of competitiveness of product and servicing
§         control items and control points
§         customer servicing and countermeasure for complaint
§         utilization of such statistical control methods as control charts and other statistical concepts
§         assurance from customer’s viewpoint
§         contribution to performance of QC circle
§         technique to grasp customer satisfaction
§         actual conditions of control activities

27. Comparison of the Deming Prize and Baldrige Award, 9
8.      Quality Assurance
§         procedure for the development of new products and services
§         safety and immunity from product liability
§         customer satisfaction
§         process design, analysis, control and improvement
§         process capability
§         instrumentation, gauging, testing and inspecting
§         equipment maintenance and control of subcontracting, purchasing, and services
Deming Prize
9.      Results
§         measurement of results
§         substantive results in quality, services, delivery time, cost, profits, safety environments
§         intangible results
§         measures for overcoming defects
10.  Planning for the Future
§         grasp of the present state of affairs and the concreteness of the plan
§         plans for further advances
§         linkage with the long term plans

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 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
Performance Indicators
No. of Responding companies
Direction of Indicator
Average annual positive performance improvement
positive (favorable)
negative (unfavorable)
no change
Operating Measures
Reliability
Timeliness of delivery
Order processing time
Errors or defects
Product lead time
Inventory turnover
Costs of quality 12 9 6 8 7 5 1 2
11.3
4.7
12.0
10.3
5.8
7.2
9.0
Employee-related measures
Employee satisfaction
Attendance
Turnover
Safety/health
Suggestions received 11 14 3
1.4
0.1
6.0
1.8
16.6
Customer Satisfaction
Overall customer satisfaction
Customer complaints
Customer retention 10 4
2.5
11.6
1.0
Financial Performance
Market share
Sales per employee
Return on assets
Return on sales
13.7
8.6
1.3
0.4
Source: Adapted from U.S. General Accounting Office,
Management Practices: U.S. Companies Improve Performance Through Quality Efforts, Washington, 1991, pp
SPRING 1993

35. Increased Customer Satisfaction Lower Costs
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