The Comparison of the Deming
Prize and the Baldrige Award
- Handouts -
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.
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.
2.
3.
4.
5.
6.
7.
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
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.
2.
3.
4.
5.
6.
7.
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
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.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
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
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
4.0
5
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 customer’s 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 customer’s 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 customer’s 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
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
Comparison of the Deming Prize and Baldrige Award
Topic
Baldrige Award
Deming Prize
Definition of
Quality
Primary Focus
“customer-driven quality” it views quality
as defined by the customer
customer satisfaction and quality
“conformance to specifications” it views quality
as defined by the producers
statistical quality control
Overall
Approach
Purpose
quality of management
management of quality
promote competitiveness through total
quality management
manufacturing, service and small business
promote quality assurance through statistical
techniques
essentially private or public manufacturing
60% result, 40% process
60% process, 40% results
Scoring Weight
different weight for each criteria
equal weight in 10 criteria
Consideration
less concern
Information
Management
Continuous of
the award
Winners
heavily concern
concern in productivity, delivery, safety, and
environment
less concern
N/A
Japan Quality Control Medal
Maximum of two per category
All firms meeting standard
Scope
U.S. firms only
Firms for any country
Applications
$2500 and 75 pages packet
Grading time
six months
1000 pages and one year working with
consultant from the union of Japanese Scientist
& Engineers
one year
First Award
1987
1951
Sponsor
National Institutes Standards and
Technology
Union of Japanese Scientists and Engineers
Types of
Organization
Orientation
Comparison of the Deming Prize and Baldrige Award, 2
Topic
Grading
Criteria
Baldrige Award
1.
Leadership
Deming Prize
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

relationship between

policies and long term & short
term planning
responsibility to society
unique and creative

leadership technique
Comparison of the Deming Prize and Baldrige Award, 3
Topic
Baldrige Award
Deming Prize
Grading
Criteria
2.
2.
Organization and its
Management
Information and Analysis
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


committees and their activities

utilization of staff
customer data and analysis
analysis of quality and data of

subcontractor and distributor or sales
agent
utilization of QC Circle

activities

QC diagnosis
Comparison of the Deming Prize and Baldrige Award, 4
Topic
Baldrige Award
Deming Prize
Grading
Criteria
3.
3.
Quality of Strategy Planning
Education and dissemination
operation target and strategy

target

education program and results

function of planning

QC
degrees of understanding of

quality improvement plan
teaching of statistical

concepts and methods
unique and innovative

planning for strategy

QC
grasp of the effectiveness of

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

collection of external

information
control and operation
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.
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
Analysis
measurement, standardization, 
utilization of statistical

data system
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.
reliability and achievement of 

product and servicing
Standardization
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
Grading
Criteria
Baldrige Award
7.
Customer Satisfaction
Deming Prize
7.
Control
quality of product and
system for the control of


servicing from customer’s viewpoint 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
Comparison of the Deming Prize and Baldrige Award, 9
Deming Prize
Deming Prize
8.
9.
Quality Assurance
procedure for the development

of new products and services

Results
measurement of results
safety and immunity from

product liability
substantive results in quality, services,

delivery time, cost, profits, safety
environments


intangible results
process design, analysis,

control and improvement

measures for overcoming defects

grasp of the present state of affairs

and the concreteness of the plan
customer satisfaction
process capability
instrumentation, gauging,

testing and inspecting
equipment maintenance and

control of subcontracting, purchasing,
and services
10. Planning for the Future

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
organization’s quality efforts
The 2000 Award Recipients:
Award Recipients will be announced in midNovember 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.
Motorola’s prices fall an average of 8-12 percent a year; it’s
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 Apple’s 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 OSHA’s
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 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.
5. Eastman’s 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 team’s performance.
8. 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.
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 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%.
Impact of Quality Improvement on Business
Performance
Performance Indicators
No. of
Responding
companies
Direction of Indicator
positive
(favorable)
negative
(unfavorable)
no change
Average annual
positive
performance
improvement
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
Source: Adapted from U.S. General Accounting Office,
Management Practices: U.S. Companies Improve Performance Through Quality Efforts, Washington, 1991, pp. 18-28.
SPRING 1993
Result
1.
2.
3.
4.
5.
6.
7.
Increased Customer Satisfaction
Lower Costs
Reduced Product Development Time
Increased Employee Satisfaction
Higher Quality Products
Innovation
Increased Productivity
Percent
Average Category Scores
100
90
80
70
60
50
40
30
20
10
0
SVC
ED
0
Sue Rohan, David Luthy
Education Pilot Program
Overview
1
2
3
4
Categories
5
6
7
Percent
Average Category Scores
100
90
80
70
60
50
40
30
20
10
0
HE
K-12
0
Sue Rohan, David Luthy
Education Pilot Program
Overview
1
2
3
4
Categories
5
6
7