Deming's SOPK: System of Profound Knowledge

Discussion in 'Psychology' started by harrytrader, Apr 26, 2003.

  1. Many outside Quality Field ignore who Deming is so this is an article from

    Los Angeles Times

    Monday, October 25, 1999
    Home Edition
    Section: Special Section
    Page: U-8
    The 50: People Who Most Influenced Business This Century

    Rebuilding Japan With the Help of 2 Americans

    8. Douglas MacArthur (1880-1964) and W. Edwards Deming (1900-1993).
    Rebuilding Japan

    Japan's path from post-war devastation to export powerhouse has involved many important factors, a lot of hard work and a bit of luck. But two Americans who played important parts in the world's greatest economic recovery story--a story that has altered lifestyles around the world and sent countless vehicles, VCRs and Walkmans into our homes--are Gen. Douglas MacArthur and quality guru W. Edwards Deming.

    MacArthur's principal contribution as supreme commander for the Allied Powers in Japan (1945-1951)--a de facto dictator--was to break apart an outdated and ossified economic and social structure, allowing Japan's inherent creativity to blossom. "This was all very important for the development of Japan's post-war economy," said Masayoshi Tsurumi, an economics professor and financial historian at Hosei University.

    On the corporate front, MacArthur smashed the grip of Japan's family trusts, known as zaibatsu, which had dominated Japan's economy for decades and sent their avaricious tentacles into every corner of economic life. Although some survived in modified form, including Mitsui, Mitsubishi and Sumitomo, the retrenchment opened the field to a new breed of innovators with names like Sony, Honda, Toyota and Panasonic that would over the next 30 years catapult Japan onto the global stage.

    On the labor front, MacArthur encouraged trade unions, which further checked the oligopolies, broadened Japan's wealth distribution and helped develop an increasingly affluent middle class that would serve as a domestic base for exporters. And his farm reform policies, arguably his most far-reaching achievement, blunted the sort of rural discontent that would soon spring Mao Tse-Tung to power in neighboring China, argued MacArthur biographer William Manchester in "American Caesar."

    Although some insist that the Japanese labor movement was eventually co-opted, its members enjoyed sharply expanded living standards, a far stronger voice in production decisions than their American counterparts and, for many, lifetime employment. This spurred tremendous company loyalty, a minimum of labor disputes and a companywide commitment to quality.

    In another important move, MacArthur brought from Detroit Joseph M. Dodge, a former president of the American Bankers Assn., who overhauled Japan's budget, tightened monetary policy and strengthened the banking system. The general also ensured that a large number of war contracts went to Japan during the Korean War. Those war orders gave cash-short companies the confidence to invest in plants and equipment that would soon yield tremendous dividends as the nation's export machine revved up.

    As Japan's products started moving to overseas markets during the 1950s and early 1960s, however, their quality was often a joke. "Made in Japan" had such a bad connotation initially that some companies set up plants in the Japanese village of Usa, which allowed them to say their products were "Made in USA." It's difficult to believe now, but even Japan's vaunted autos flopped miserably when first introduced to the United States in the late 1950s.
  2. Did Deming's SOPK reveal any lights regarding the financial markets? If yes, what are they?
  3. Babak


    Shhhh! Harry what are you doing bringing up these two guys? Don't you know that can totally mess up the image of the US as an imperialistic monster gobbling up the world?
  4. maxpi


    Deming had figured out something and at the time, Americans would not listen to him. Why should they, they had the only functioning economy on the planet, no reason to change anything, just export cheap junk. By the 70's Americans were making the worst cars on the planet and the Japanese were making great ones, at least as far as quality people are concerned, I couldn't stand the little front wheel drive pieces of shit personally, I'm a rear wheel drive close ratio 4 speed type of guy. Japan also had the strong dollar going for them so they could put "$10,000" into building a "$5,000" car and for both of those reasons Japan kicked some car sales ass. Reagan (or is it Raegan?) brought the dollar down to the 85 yen level and American manufacturers finally listened to Deming and Japan's ability to compete was reduced. So much for your quality krap being the last word, better to have the economic clout!!

  5. maxpi


    A quote from Deming:

    "Will best efforts bring improvement? No, Deming argues that best efforts not guided by knowledge will dig us deeper into the pit we are in. What is needed is new knowledge. There is no substitute for knowledge. "

    This is just about the third law of thermodynamics; everything left to itself is going to a lower state of organization. The only way to take it to a higher state of organization is to input some intelligently derived energy. Energy alone won't do it, if that were the case we could get a new city simply by bombing the old one. Intelligence alone won't do, I can, and do on occasion, sit around and think up things all day but nothing will go to a higher state of organization unless I get busy and combine the two.

    Most work done by most people on the planet is about the thermodynamics thing, repairing, painting, reorganizing etc.

  6. Deming is very popular in Japan, in fact he has even received the Second Order Medal of the Sacred Treasure from the Japenese Emperor:

    "Deming received the PhD in mathematical physics from Yale University in
    1928. Among his many honors, in 1960 the Emperor of Japan decorated him with the
    Second Order Medal of the Sacred Treasure and in 1987 President Reagan awarded
    him the National Medal of Technology."

    He is even the ONLY foreigner to have received it.

  7. The lights come from outside to enlighten your inside but you have to work from inside so as to do anything useful with these lights :D. Well the problem is that it can take books you know to explain :). I will write a 5 page article one day as I said in another thread I have done it in the past for Chaos Theory and Stock Market (it's a french article I made it translated but lost the translation if ever I found it again I will post it :D ), this year I will talk about Statistics, Knowledge and Stock Market.

  8. Yeah the US wasn't interested by Quality at that time :

    "After World War II, the U.S. was the only major power with an intact economy. Deming and Juran found their quality improvement theories irrelevant to U.S. business leaders. They were interested in quantity, not quality.

    Deming found a more appreciative audience in Japan, where he was conducting postwar census work. He was invited to speak about his views during a
    now-famous dinner in the early 1950's.

    Shortly after, <B>Dr. Deming predicted in the early 1950's that the Japanese industry would become a world-class force equal to any other country. Everyone around the world laughed. The Japanese didn't laugh :D </B>. They worked hard to apply the lessons learned. Henry Ford's book on manufacturing (written decades earlier) became a Japanese best seller. There was a weekly radio program that trained workers, lead hands, supervisors, and managers on statistics and Dr. Deming's methods. It became a national hit in most Japanese homes. Drs. Deming and Juran because celebrities in constant demand as speakers and consultants.

    Decades later, the Emperor of Japan awarded Dr. Deming with the highest Japanese award for a civilian in recognition for his decades of hard work and leadership he gave to the Japanese people and their government.

    The Japanese business leaders listened, the rest is history."

    I have met a friend of Deming when I was a student in ingienering school. Every time I talk with the guy he used to say to me "calculation is not important", I was scratching my head and asked myself : "what ?!!! we talk about statistics and he dare say to me that calculation is not important what on earth is important then ?" Only after a long time after years of professional experience I understood what he means : calculation is just a tool but tools doesn't substitute for thinking and knowing concept and how to apply them is the first most important things whereas calculation is just a tool if you don't master the concept you can just hit your own fingers with a hammer :D

    He told me than Deming has been very discouraged by the attitude of americans and europeans because of this quantitative obsession whereas the japenese who he said were not great mathematicians have been much more opened to the concepts.

  9. IMHO, Deming in his new economy age thesis has revealed many insighful arguments for us to study.

    And these arguments such as his preference of co-operation against anti-trust laws were formulated to resolve the potential problems in the future economy of this world.
    #10     May 5, 2003