The Comparison of the Deming

Prize and the Baldrige Award

- Handouts -
The Deming Prize
The Deming Prize is Japans 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 worlds 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.
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.
Check list of application for
Deming Award - Policy
1. Policies pursued for management quality, and
quality control
2. Method of establishing policies
3. Justifiability and consistency of policies
4. Utilization of statistical methods
5. Transmission and diffusion of policies
6. Review of policies and the results achieved
7. Relationship between policies and long- and
short-term planning
Check list of application for Deming
Award - Organization and its Management
1. Explicitness of the scopes of authority and
responsibility
2. Appropriateness of delegations of authority
3. Interdivisional cooperation
4. Committees and their activities
5. Utilization of staff
6. Utilization of QC Circle activities
7. Quality control diagnosis
Check list of application for Deming
Award - Education and Dissemination
1. Education programs and results
2. Quality- and control-consciousness, degrees of
understanding of quality control
3. Teaching of statistical concepts and methods, and the
extent of their dissemination
4. Grasp of the effectiveness of quality control
5. Education of related company (particularly those in the
same group, sub-contractors, consigness, and
distributers)
6. QC circle activities
7. System of suggesting ways of improvements and its
actual conditions
Check list of application for Deming Award -
Collection, Dissemination and Use of Information
of Quality
1. Collection of external information
2. Transmission of information between
divisions
3. Speed of information transmission (use
of computers)
4. 4. Data processing statistical analysis of
information and utilization of the results
Check list of application for Deming
Award - Analysis
1. Selection of key problems and themes
2. Propriety of the analytical approach
3. Utilization of statistical methods
4. Linkage with proper technology
5. Quality analysis, process analysis
6. Utilization of analytical results
7. Assertiveness of improvement
suggestions
Check list of application for Deming
Award - Standardization
1. Systematization of standards
2. Method of establishing, revising, and
abolishing standards
3. Outcome of the establishment, revision, or
abolition of standards
4. Contents of the standards
5. Utilization of statistical methods
6. Accumulation of technology
7. Utilization of standards
Check list of application for Deming
Award - Control
1. Systems for the control of quality and such
related matters as cost and quantity
2. Control items and control points
3. Utilization of such statistical control methods
as control charts and other statistical concepts
4. Contribution to performance of QC circle
activities
5. Actual conditions of control activities
6. State of maters under control
Check list of application for Deming
Award - Quality Assurance
1. Procedure for the development of new products and services
(analysis and upgrading of quality, checking of design, reliability,
and other properties)
2. Safety and immunity from product liability
3. Customer satisfaction
4. Process design, process analysis, and process control and
improvement
5. Process capability
6. Instrumentation, gauging, testing, and inspecting
7. Equipment maintenance, and control of subcontracting,
purchasing, and services
8. Quality assurance system and its audit
9. Utilization of statistical methods
10. Evaluation and audit of quality
11. Actual state of quality assurance
Check list of application for Deming
Award - Results
1. Measurements of results
2. Substantive results in quality, services,
delivery time, cost, profits, safety,
environments, etc.
3. Intangible results
4. Measures for overcoming defects
Check list of application for Deming
Award - Planning for the Future
1. Grasp of the present state of affairs and
the concreteness of the plan
2. Measures for overcoming defects
3. Plans for further advances
4. Linkage with the long-term plans
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 50
1.2 Policy 30
1.3 Management control system and quality improvement process 30
1.4 Allocation and utilization of resources 20
1.5 Responsibility to society 10
1.6 Unique and creative leadership technique 10
2.0 Information and analysis 7.50%
2.1 Utilization of analysis technique or system 15
2.2 utilization of information about product quality and servicing quality 10
2.3 Customer data and analysis 20
2.4 Analysis of quality and data of subcontractor 10
2.5 Analysis of quality and data of distributor or sales agent 10
2.6 Employee-related data and analysis 5
2.7 Unique and innovative analysis of information 5
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 20
3.2 Function of planning 20
3.3 Quality improvement plan 30
3.4 Unique and innovative planning for strategy 5
4.0 Utilization of human resources 15%
4.1 Control and operation 30
4.2 Quality-consciousness and participation of employees 50
4.3 Training and education concerning quality 30
4.4 Personnel assessment, motivation, award system 30
4.5 Unique and innovative strategy concerning utilization of human resource 10
Check list of application for Malcom
Baldrige National Quality Award, 3
5.0 Quality assurance of product and servicing 15%
5.1 Reflection of customers opinion on product and servicing 20
5.2 Development of new product and new servicing 20
5.3 Design of new product and new servicing 30
5.4 measurement, standardization, data system 10
5.5 Engineering 10
5.6 Audit 15
5.7 Recording 10
5.8 Safety, health and sanitation, environment 10
5.9 Assurance/effectiveness 15
5.10 Unique and innovative approach to quality assurance of product and servicing 10
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 25
6.2 Reduction of scrap, rework, rejection concerning product and servicing 20
6.3 Reduction of complaint and claim suit concerning quality 25
6.4 Reduction of assurance- or site-related assistance operation 20
6.5 Innovative index and economic gain for quality improvement 10
7.0 Customer satisfaction 30%
7.1 Quality of product and servicing from customers viewpoint 100
7.2 Comparison of competitiveness of product and servicing 50
7.3 Customer servicing and countermeasure for complaint 75
7.4 Assurance from customers viewpoint 50
7.5 Unique (or innovative) technique to grasp customer satisfaction 25
Total 1000 100%
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
companys performance with the worlds 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
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 less 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
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

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
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
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
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 customers
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
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
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 customers 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 customers
viewpoint
contribution to performance
of QC circle
technique to grasp customer
satisfaction
actual conditions of control
activities
Comparison of the Deming Prize and Baldrige Award, 9
Deming Prize
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
measures for overcoming defects
plans for further advances
linkage with the long term plans
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
organizations 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.
THE 2001 MALCOLM BALDRIGE NATIONAL
QUALITY AWARD REGIONAL CONFERENCES, 2
Motorola (1998)
1. 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.

2. Motorolas prices fall an average of 8-12 percent a year; its
cellular phone prices 25% a year.

3. 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 68000 series which later
became the brains of Apples Macintosh line.

4. 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.
Eastman Chemical Company
1. 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 OSHAs
voluntary Star Program.
2. 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.
3. 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.
4. Over the past four years, more than 70% of Eastmans 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.
5. Eastmans new product development practices are ranked second among a group of 13
leading chemical companies.
6. 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.
7. Data use is deployed widely, with virtually all employees using data to track their
individual and/or their teams performance.
8. Eastman has a fully integrated planning process that systematically deploys the key
business priorities to all employees and all work groups throughout Eastmans innovative
four-dimensional organizational structure.
Quality Achievements
Ames
1. 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.

2. 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.

3. Productivity, as measured by sales per employee, increased by 48% from 1987 to
1992.

4. 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.

5. 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.

6. Ames has developed a consolidated supplier base be selecting suppliers who
share the companys 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%.
Impact of Quality Improvement on Business
Performance
Source: Adapted from U.S. General Accounting Office,
Management Practices: U.S. Companies Improve Performance Through Quality Efforts, Washington, 1991, pp. 18-28.
Performance Indicators No. of
Responding
companies
Direction of Indicator Average annual
positive
performance
improvement
positive
(favorable)
negative
(unfavorable)
no change
a. 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
9
5
12
8
6
7
6
6
5
0
1
0
0
0
1
0
0
0
0
1
1
2
0
11.3
4.7
12.0
10.3
5.8
7.2
9.0
a.Employee-related measures
Employee satisfaction
Attendance
Turnover
Safety/health
Suggestions received
9
11
11
14
7
8
8
7
11
5
1
0
3
3
2
0
3
1
0
0
1.4
0.1
6.0
1.8
16.6
a.Customer Satisfaction
Overall customer satisfaction
Customer complaints
Customer retention
14
6
10
12
5
4
0
1
2
2
0
4
2.5
11.6
1.0
a. Financial Performance
Market share
Sales per employee
Return on assets
Return on sales
11
12
9
8
9
12
7
6
2
0
2
2
0
0
0
0
13.7
8.6
1.3
0.4
SPRING 1993
Result
1. Increased Customer Satisfaction
2. Lower Costs
3. Reduced Product Development Time
4. Increased Employee Satisfaction
5. Higher Quality Products
6. Innovation
7. Increased Productivity
Average Category Scores
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7
Categories
P
e
r
c
e
n
t
SVC
ED


Sue Rohan, David Luthy
Education Pilot Program
Overview
Average Category Scores
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7
Categories
P
e
r
c
e
n
t
HE
K-12
Sue Rohan, David Luthy
Education Pilot Program
Overview