The four part of Deming’s System of management process is a systematic method that can be used in today’s society to improve and better aid business managers in successful running of their company. The four parts include: Systems, Variation, Cause & Effect, and Psychology. The following paper describes each of the four parts and relates each step to real-life experience.
Part 1: Systems
The first part of the Deming’s system is systems. “A system is a series of functions or activities (sub-processes, stages-hereafter components) within an organization that work together for the aim of the organization.” (Latzko & Saunders, p.35) A system consists of various individuals or parts which are interconnected. Rather than a series of distinct parts acting alone, the system becomes an organization of interdependent relationships. Optimization of the entire system will decrease competition and each component or individual will work towards achieving a common goal. “Management’s job is to coordinate the activities of each component. It is their task to see to it that the activity of each component contributes to the aim of the system.”(Latzko & Saunders, p.36) The upper management needs to create such environment that promotes cooperation thus making them productive and making the company successful. As a sales representative my job was to provide the best sales services to my customers. The company allowed a buy down to the customer based on the share margin. The financial department relied on the sales representative to get all the necessary information to calculate the share margin for a customer. It is very important that the sales representative do not fudge the data to give the customer additional benefits or in some case not enough benefits than the correct share margin. I provided the best data to the financial department so the customers would the best possible buy down but have seen all sorts of fudging data’s to get there sales up. Therefore sales representatives were in a constant state of relationship with the financial department.
Part 2: Variation
The second part of the Deming’s system is variation. The theory of variation is practically present in every aspect of life. To manage successful business managers needs to understand the theory of variations and how it affects individuals in different ways. Process Behavior Charts (PBCs) are very useful in monitoring the progress of the company as a whole. These charts help identify natural variations that are outside an employee’s control. If the data points are within the upper and the lower limits of the control charts than the system is in-control and any discrepancy is due to the natural variation within the system. “It is the manager’s job to know the difference. Without the basic knowledge, any management action will be mere tampering.” (Latzko & Saunders, p.39) By understanding these natural variations, the upper management can adjust or improve the necessary factors and increase the performance of the employee and the ultimately the system.
My company has always had a better sales average particularly during the summer months. After three months of high sales, during these summer months, my sales numbers started to decline. They didn’t decline a tremendous amount, however my manager felt it was an important topic to discuss at the time. I believe that the sales figures declined due to an uncontrollable natural variation, as a result of the change in season. People tend to purchase a higher amount of cold beverages in the summertime as compared to the fall and winter when the temperature is much colder. Naturally, the sales of the cold beverage declines after summer and a control chart will identify the random factor of seasonal variations. If the manager used control charts to evaluate the sales performance, it will be clear that there are natural variations that affect the sales.