Deming’s 14 points and the Santa Cruz Guitar Company “Richard Hoover has built a culture that thrives on sharing, teaching and challenging. The collaborative nature of our luthiers insures exceptional instruments that last for more than a lifetime. ” – Santa Cruz Guitar Company Santa Cruz Guitar Company is a business composed of dedicated craftsmen and music lovers who craft acoustic guitars with great attention to detail. Their craft is one similar to the kind handed down by generations before them.
To build the highest quality acoustic guitars, SCGC takes the time and pays attention to the fine detail that customers worldwide have grown to appreciate. Quality is a central focus at SCGC and their founder, Richard Hoover, makes certain that this attention to detail and love of the craft is instilled in each employee on a daily basis. To continually foster this mindset, however, is often a challenge to most businesses. In this paper, we take a closer look inside SCGC and evaluate the processes in place under the lens of Dr. Deming. The class text allows us information that can be analyzed and considered in light of Dr.
Deming’s 14 points philosophy so that we are able to extract examples of that philosophy in real life situational review. Point 1: Create a Vision and Demonstrate Commitment (99) Deming’s point one is: “Create constancy of purpose toward improvement of product and services, with the aim of becoming competitive and to stay in business and to provide jobs” (Evans, 143). What Deming is talking about here is keeping customers happy by giving them what they want, every time they come back. This means keeping the quality high and finding ways to improve the already quality product that is being made.
If these things are done correctly then the business will be around for a while and provide jobs because the customers will keep coming back. Santa Cruz Guitar Company, SCGC, does this in all of their steps. They improve their products by keeping track of everything that was done to a specific guitar so if it sounds awesome then they can try to recreate it. This is done in step 4 while the top is being trimmed. Then when step 7 comes around and they do the final testing if the sound “knocks their socks off” then they can try and recreate it (Evans, 146).
One of the ways they try to improve the product is by allowing their luthiers to build two personal guitars a year. This allows the luthiers to try new methods of building the guitar and see if they can improve the sound or speed of making the guitar (Evans, 147). In the FAQ section of SCGC’s website one of the customers asked about what makes their guitars so much lighter than other guitars. Richard answered this by telling him about the 7 years of R&D to add strength to the guitar while making the guitar. This shows that SCGC is focused on improving their product (Santa Cruz, FAQ).
Point 2: Learn the New Philosophy (99) Deming’s point two is: “Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change” (Evans, 143). What this point is talking about is changing the philosophy of a company needs to change from a metric driven approach to a quality driven approach. This is hard to do because quality is a hard thing to see when it is working. Metrics are easy to track and see but quality isn’t. SCGC only hires people who have a team attitude and a passion for guitars (Evans, 146).
These people will always try to do the best job they can because they have a love of guitars. Also, SCGC workers are encouraged to go out and start their own luthier business (Evans, 147). On SCGC’s website there is a question about the bench-style process verses an assembly line. Here is the answer: “Instead of one process, people carry on a logical series of processes. An assembly-line situation is very efficient, but you don’t always get what you want. You get a lot of variety and inconsistency in the sound, because each piece of wood is different.
If it’s not treated just so, it will have different characteristics, and they may cancel each other out” ( Santa Cruz, Inside the Shop). This tells me they put the quality of the guitar above the speed they can build them. SCGC could have easily focused on cranking out decent guitars quickly and not caring about how they sound as long as they worked. Instead they used a different method called bench-style, which allows people to work on the guitar until a logical stopping point. Point 3: Understand Inspection (100) Deming’s third point focuses on using inspections as part of a continual improvement system.
When a company results to inspecting finished items through a kind of sampling and quota system, this can lead to a more costly and more time consuming fix than there otherwise might have been if routine inspections at regular intervals throughout the process were had. If inspection is used as more of a statistical tool throughout the process of product development, it could be more easily remedy any potential issues that are outside normal acceptable variation levels. That way, the product line can be fixed mid-assembly so that additional products are not created with the same issue.
The inspection portion of quality management is not a device that should be used for fear against employees, but rather, inspections should be used to gather data and understand more about the process, parts, and reasoning behind a certain system so that monitoring is beneficial and improvements can be more effectively made (Evans, 100). At SCGC, an example illustrating Deming’s ideal use of inspection includes the fact that a guitar does not move to the next station of production until the craftsman and a more senior member of the staff inspects the work and they are both satisfied it meets quality standards.
Point 4: Stop Making Decisions Purely on the Basis of Cost (100) The text notes in its description of Deming’s beliefs, that pay was not seen as a motivator to Dr. Deming. The text supports the proposition somewhat, advising that industrial psychologists support that particular idea and that money is a tool used by managers to compensate for an inability to intrinsically motivate employees (Evans, 97). Deming urged companies to not just focus on a numerical amount and base employee performance on that solely.
The additional intangible value that comes from creating a quality product in a nice environment means increased employee motivation and positive feelings, but it also increases customer goodwill and market reputation, which should lead to greater rewards long term. Deming also goes along with the number-crunching idea and points out flaws in traditional managerial thought in making decisions solely based on immediate savings. Deming notes “hidden costs” including, among others, increased transactional costs, travel charges, increased inspection costs, and loss of volume discounts (Evans, 100).
SCGC uses machinery to help cut costs, however, the case notes that neck cutting is completed by hand forty-percent of the time because of customer specification. The case also notes that the shop is composed of a small number of skilled luthiers whose overriding focus is on producing quality guitars. However, time consuming activities like bending the wood, lacquering, and applying inlays are completed not because they are cheaper than having a machine do them, but because they are deemed to increase the overall quality of the final guitar. Point 5: Improve Constantly and Forever (101)
Deming’s fifth point is to improve constantly and forever. You must understand the needs of your customer, the end user of the product. This will enable you to improve the product through the process based on their need and want. You make improvements in the process by taking out variations of the product within each process. Based on Deming’s chain reaction theory, provided on the following page, the costs will decrease, production will increase and quality improves (Evans, 101). Repetition is one way of improvement, the more times you perform a task the better you will become at the given task.
In order to improve you must understand there is always room for improvement. Don’t focus on the defect but instead focus on the reason for the defect. Change the process that caused the defect and the quality will be improved. Source: Evans, James R. , and William M. Lindsay. Managing for Quality and Performance Excellence. 8th Ed. South-Western, Cengage Learning , 2008. Point 6: Institute Training (101) In order to help with improvements in the process and production of a product, training is extremely important.
Training within a company shows the workers that the company is willing to invest in them to help them improve in the position they currently hold as well as in future positions. The more a person learns and is able to apply the further in the company they can go if they desire. Training empowers the workers and helps them to understand their position better as it ties into other positions within the process. The more knowledgeable the person is on the process the higher the ability to see opportunity for improvements (Evans, 101). When in training people need to know what to do and why they are doing it.
SCGA encourages their employees to continue their education either by attending classes off site or by taking advantage of an internal option that allows them to make up to two instruments for their personal use. By allowing the employees to make an instrument for personal use the employee is free to try new methods, which could in turn improve the quality of the product (Evans, 147). These points work hand in hand. Training enables improvements, which will in turn improve the quality of the process and product. This once again follows along with Deming’s chain reaction theory (Evans, 93).
Point 7: Institute Leadership (101) Deming’s seventh point deals with leadership. He recognized that leadership can be one of the greatest obstacles that prevent growth with organizations. The lack of effective leadership in management positions can be detrimental to companies since employees aren’t receiving the proper guidance to be more efficient at their jobs. A great manager can be identified by the way they coach their employees to develop their skill sets, to put more focus on teamwork, and to do better at their current position while preparing them for future positions.
Leadership will always be a relevant issue to every organization because it is a necessity as the next generation of managers moves up through these organizations. Santa Cruz Guitar Company is divided into 6 workstations and they have experienced luthiers at each station that is encouraged to make important quality decisions. The company teams up luthiers with more senior luthier as well to help them develop their skill set and work together as a team. Since, SCGA instituted this leadership and coaching within their organization it is a great example of Deming’s point seven.
SCGA website also refers to the owner’s leadership ideals since he puts a great focus on the luthiers working together as a team rather than as an individual. This helps to accelerate the manufacturing process because of the different skills and talents that each individual luthier can bring to the guitar making process. Point 8: Drive Out Fear (101) The eighth point that Deming makes is actually an underlying factor throughout the majority of the 14 points. Fear is a relevant issue that can affect all organizations in many different ways through the fear of reprisal, failure, uncertainty, giving up control, and change.
In order for an organization to run smoothly it is essential for managers and employees to have respect for one another and understand the importance of creating corporate culture that is sensitive to the different fears. Fear can impact quality, production, performance, and long-term goals because it can hinder the employee from being honest and open about certain situations due to the fear of what could happen if they speak up. One way that SCGA helps to drive out fear from the company environment is the fact that workers are encouraged by the company to open up their own luthier business if that is an aspiration of theirs.
This helps to alleviate employee concerns of reprisal if the company found out they wanted to start their own business someday. Another example might be found in the seventh step of the guitar making process where the luthier keeps notes on how they build the top of the guitar. This allows them to recreate the top again when they find a special kind of sound to the instrument which can push out the fear of failure. On the SCGA website, a question was raised in regards to the lifetime warranty and the company’s future plans which helps to address the fear of change.
Richard Hoover responded by saying, “I have inculcated the vision and oversight into my trusted colleagues so that whether through my dotage or providence they are fully equipped to carry on at any given time” (Santa Cruz). Point 9: Optimize the Efforts of Teams (102) Teamwork, when done correctly, allows for greater overall efficiency and production. Deming stressed that it is not enough to group people together, but there must be a common purpose, sufficient authority, and limited barriers.
Deming noted that the competition instilled through routine egocentric things like perceived power, salary, and internal competition means less cooperation and positive behavior that inevitably leads to poor quality than might have been had with more cooperation toward a greater goal. Cooperation not only refers to that among employees, but it can also extend to supplier relationships and help create synergies to enhance just-in-time delivery, lower inventory costs, increase coordination efforts, and decrease costs, so as to provide a lower cost and better quality toward customers.
At SCGC, workers collaborate together in the production of each guitar. The seven major steps in the guitar’s manufacture are progressively completed at different stations and done by a team of luthiers. Further, the team mentality is strengthened even at the beginning levels of employment because the company reports only recruiting those who love guitars and have a desire to work within a team environment. Point 10: Eliminate Exhortations (102) Deming’s tenth point concerning the elimination of exhortations sought to have management see a more complete picture.
Trying to use only things like motivational posters and other programs directed at workers to push improvement many times not enough. Employees become frustrated at the focus on improving their performance when they are not provided with the tools and proper situation to do so. In fact, Deming says, by not attempting to diagnose and repair issues with the overall system, quality may degrade as workers attempt to fix problems themselves, leading to increased variation. Motivation is better achieved through the use of sustained positive leadership and being able to trust programs put forth by management.
There does not appear to be any indication in the case summary that SCGC attempts to focus on individual workers more than the entire process. The seven step process includes several steps and specific parameters that allow luthiers at each station to be able to properly complete their work. The focus is not on cheap slogans or posters, but rather, the design process is created so that each station adds quality and purpose to the guitar before the piece is sent forward in the chain. Point 11: Eliminate Numerical Quotas and Management by Objective (MBO) (102)
The idea here is that while measurements may be good, managing people to the numbers causes fear. It’s the idea that if an appraisal or reward is directly tied to a achieving a number, it only creates fear. The existence of fear could create an environment that is counterintuitive to quality when the worker cuts corners to meet the quota assigned in order to avoid reprimand or miss incentives. To continue with the thought of a managing by objectives causing problems, if the objective is simply a number, like increase sales over last year by 3%, and there is not specific method to achieve that quota, it has no productive meaning.
For Santa Cruz Guitar’s small operation there are no apparent quotas to hit. In contrast, there are workstation teams that are empowered to determine quality before they release the product to the next station. In this manner they are managing by quality rather than number produced in a given time period. Santa Cruz only produces 700 guitars a year. The focus in the highest level of craftsmanship they can find, rather than producing quantities. Santacruzguitar. com states that the amount they produce in one year is equal to what many companies produce in a half day. This allows a custom focus.
Point 12: Remove Barriers to Pride in Workmanship (103) This is simply the concept that people should not be treated as “a commodity” (Evans, 103) or just another machine part of the process. Deming cites performance appraisals as one of the biggest issues against workers taking pride in their individual work. The environment should encourage teamwork in quality. This is evident in Santa Cruz Guitar Company first in the hiring methods. Per the text, they make sure all employees want to work in a team type environment and that they have a passion for making guitars (146).
To encourage creativity, they allow employees to make two guitars a year for personal use; thus, giving them personal attachment to detail and quality that they would desire in an end product. In today’s environment, teamwork is the key component of Santa Cruz Guitar as a way to speed the learning curve as a way to produce more quality instruments faster. “If I hold true to the principals and ethics of lutherie traditions, I can work as a team with others to accelerate the learning curve without compromise” (Santa Cruz). Point 13: Encourage Education and Self-Improvement (103)
Point 13 refers to the need for companies to encourage employees’ continuing education and self-development, by doing this companies increase the value of their employees as well as increasing their motivation (Evans, 103). Some companies offer their employees education assistance programs and flexible schedules that allow employees achieved this point. It is important for companies to understand that employees need more than the specific skills for the job. At Santa Cruz Guitar Company luthiers are encouraged to take external courses in order to explore new guitar building techniques.
Employees are also allow to practice by building two instruments a year for personal use in order to become more familiar with the entire guitar building process (Evans, 147). Richard Hoover, one of the owners of Santa Cruz Guitar Company, “trained several of today’s most in-demand individual luthiers. As a matter of fact, it is fair to say that there is a Santa Cruz “school” of luthiery, a legacy that few other contemporary guitar makers can claim (Michael Gurian and Jean Larrivée come to mind)” (Santa Cruz). Point 14: Take Action (103)
Take action refers to the ability of a company to change its culture and the ability of its top leaders to embrace those changes. Cultural change must start with leadership; if the top leaders of an organization are not onboard the rest of the organization will not be (Evans, 103). Leaders have to look at their business and create ideas or tasks that will help their business grow. Santa Cruz Guitar Company recruits candidates that have the willingness to work in team environments which it is a major core competency of their business (Evans, 146).
Bill Hardin, who started his guitar building career at Santa Cruz Guitar Company and today owns Beer Creek Guitars, says the following about Richard Hoover and his experience at Santa Cruz Guitar Company “Richard went out of his way to include the luthiers who worked for him in the direction he was taking Santa Cruz towards,” he recalls, “and I always felt a sense of being a part of company that was committed to making the best” (Santa Cruz). Santa Cruz Guitar Company has grown to become a well-respected and admired company among acoustic guitar aficionados and top musicians.
Their website boasts a host of hi-level customers, including Brad Paisly, Ben Harper, Jimmy Buffett, and Joan Baez, to name a few (Santa Cruz, The Players). SCGC aims to provide the same level of customer service and quality to all its customers, however, and not just to the ones who play on bigger stages. By reviewing SCGC’s manufacturing processes with regard to both quantitative and qualitative concerns, SCGC appears well positioned to continue to serve their niche market for many years.
In analyzing SCGC’s practices underneath the scope of Deming’s 14 Point philosophy, we also see evidence of a company that is fundamentally sound with concern to quality management and has positioned itself to be able to better control not only external, but internal pressures as well. References Evans, James R. , and William M. Lindsay. Managing for Quality and Performance Excellence. 8th Ed. South-Western, Cengage Learning , 2008. Santa Cruz Guitar Company. (2013, January 29). Retrieved from www. santacruzguitar. com
