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Deming — Transcript

by Andrew Johnson · 9,874 words · 1,450 segments · language en · Watch on YouTube

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  1. 0:02hello we're back so now we're going to
  2. 0:04learn some more about Deming he's a
  3. 0:06crazy guy he had all sorts of really
  4. 0:09neat things that he did and changed a
  5. 0:12lot of management styles as we've
  6. 0:13already seen I mean it's it's pretty
  7. 0:16interesting um Demming was a
  8. 0:19statistician he did
  9. 0:23statistics and Demming is actually one
  10. 0:25of the reasons the United States won
  11. 0:27World War II
  12. 0:30yeah he actually won got got the medals
  13. 0:32and stuff for helping us win World War
  14. 0:35II and he did it through
  15. 0:37statistics so at the beginning of World
  16. 0:40War II it took about 10 hours of
  17. 0:42Maintenance to fly an airplane for one
  18. 0:44hour so 10 man hours for every hour of
  19. 0:48flight and when a part would break down
  20. 0:51they would just replace the part well
  21. 0:52Deming says that's not a good idea let's
  22. 0:55keep track of what parts break and then
  23. 0:59read designed those parts instead of
  24. 1:01keeping keeping bad stuff go through to
  25. 1:04redesign the parts and he they did at
  26. 1:08the end of World War II it took two
  27. 1:10hours of labor for one hour of flight in
  28. 1:13Germany and Japan it still took 10 is
  29. 1:17this an advantage during war yeah it's a
  30. 1:20great Advantage so when they would build
  31. 1:22F he would look at factories and look at
  32. 1:23the capacities of factories so let's say
  33. 1:26they have an airplane Factory that
  34. 1:27builds one airplane a day
  35. 1:30if they needed three airplanes a day
  36. 1:32they would just build two more factories
  37. 1:34Demi says no no no no no that's a bad
  38. 1:36idea let's break up the assembly line
  39. 1:39and look at the capacity of each section
  40. 1:42of the assembly line and then the what
  41. 1:45the the sections of the assembly line
  42. 1:48that are slower let's just double those
  43. 1:50up or triple those up so if let's say
  44. 1:54one section can make three planes a day
  45. 1:56another section can only make one three
  46. 1:59and two
  47. 2:00he just says well let's look at that
  48. 2:02choke point let's look at that one spot
  49. 2:03that only make one and let's add two
  50. 2:06extra sections on there think about how
  51. 2:09big of an advantage this is during a war
  52. 2:12and at the end of the
  53. 2:13war they said Mr Demi your ideas are
  54. 2:16great but we're not at War any longer so
  55. 2:19we don't need you he goes no no
  56. 2:21employees don't make mistakes all
  57. 2:23mistakes are caused by poor management
  58. 2:24poor job design they no no no no no
  59. 2:26that's only during a war we're not at a
  60. 2:28war go away and so he went away and he
  61. 2:32went to
  62. 2:33Japan now the stuff coming out of Japan
  63. 2:36in the 50s was
  64. 2:39junk trash right here's our junk trash
  65. 2:43cheap Japanese trash right but also the
  66. 2:48word junk is kind of interesting the
  67. 2:52word junk what does the word junk junk
  68. 2:54means trash but it also is the the word
  69. 2:57to describe these beautiful boats that
  70. 3:00they had in Japan was beautiful Japanese
  71. 3:03junk boats not trash boats junk boats
  72. 3:06but that was the name in other words the
  73. 3:09stuff coming out of out of Japan was so
  74. 3:12low
  75. 3:14quality that they're saying that that
  76. 3:16that the Japanese stuff is trash it's
  77. 3:20kind of like if they said hey um it's a
  78. 3:22bald eagle and it's garbage not go so
  79. 3:27what's that oh that's a bald eagle it's
  80. 3:29a car
  81. 3:30wow that's a pretty big insult isn't it
  82. 3:33so that's where the word junk came from
  83. 3:35Wow W now let's be fair though Japan
  84. 3:39what did Japan look like after World War
  85. 3:41II yeah it wasn't a happy place to be
  86. 3:45right but the stuff coming out of Japan
  87. 3:46was junk the
  88. 3:491960s cheap Japanese junk trash you did
  89. 3:54not want Japanese
  90. 3:55products
  91. 3:581970s started getting better started
  92. 4:01getting a lot better right now it's it's
  93. 4:03as good as anybody else is right then
  94. 4:06the
  95. 4:0680s pow right the stuff coming out of
  96. 4:10Japan was world class nobody could touch
  97. 4:13the quality of stuff coming out of Japan
  98. 4:16they were so far above and beyond what
  99. 4:19everybody else was uh it just was world
  100. 4:21class and then so the company said hey
  101. 4:23Mr
  102. 4:25Deming come on back Japanese are killing
  103. 4:28us come on back and show us how to fix
  104. 4:31our stuff so he says
  105. 4:35okay right so he went to a company
  106. 4:38called Delta Delta remember our buddies
  107. 4:42Delta yeah yeah and so Delta exact said
  108. 4:45okay Mr Deming tell us about how this
  109. 4:48works and he says it's real simple
  110. 4:50employees don't make mistakes all
  111. 4:51mistakes are caused by poor management
  112. 4:53poor job
  113. 4:54design yeah about that let's skip that
  114. 4:58what's the rest right and they said
  115. 4:59that's it that the whole
  116. 5:04key yeah but we've got some pretty bad
  117. 5:07employees Demi says that's your fault
  118. 5:09that they're bad employees
  119. 5:13oh uh we'll try it and they tried it for
  120. 5:16about three years and it didn't work and
  121. 5:19and management at Delta said
  122. 5:22look Deming your stuff works during a
  123. 5:25war we know that it works in Japan
  124. 5:28Japanese people are different than
  125. 5:29Americans
  126. 5:30uh but it's not going to work
  127. 5:32here really let's look at something
  128. 5:36let's see why did it not work with Delta
  129. 5:38first of they didn't want to admit it it
  130. 5:40takes a lot of guts to say hey it's my
  131. 5:42fault doesn't
  132. 5:43it it takes a whole lot of guts to say
  133. 5:47hey this is my fault right Delta
  134. 5:49management did not want to accept
  135. 5:50responsibility also Delta tried it for
  136. 5:53about three years how long did it take
  137. 5:56the Japanese to per perfect it
  138. 6:00about 30
  139. 6:01years isn't that a little arrogant to
  140. 6:04say oh we can do in three years what the
  141. 6:07Japanese can do in 30 years and then
  142. 6:09when it doesn't work it's like well was
  143. 6:10a bad
  144. 6:12idea wow that's why remember that list
  145. 6:16of all the airplanes falling out of the
  146. 6:18sky look in the 80s not good not good
  147. 6:22good good now there was another company
  148. 6:24called Harley-Davidson remember we
  149. 6:26talked about Harley-Davidson in the mid
  150. 6:2880s Harley-Davidson motorcycles
  151. 6:32were junk they were trash you go to a
  152. 6:36Harley-Davidson dealership and there
  153. 6:38would be cardboard underneath brand new
  154. 6:41motorcycles to catch the oil as that
  155. 6:43drip from the
  156. 6:46motorcycle wow W so Harley-Davidson was
  157. 6:49getting beat up by Honda Honda was going
  158. 6:51to take them was Honda had it Hondas
  159. 6:54were better faster cheaper safer
  160. 6:58better so Harley-Davidson said hey Mr
  161. 7:00Deming we're going to go away we can't
  162. 7:03compete with Hana can you help us and
  163. 7:06then Deming went to harleydavidson
  164. 7:08looked around and said it's real
  165. 7:11easy employees don't make mistakes all
  166. 7:14mistakes are caused by poor management
  167. 7:15or job
  168. 7:17design so the reason those motorcycles
  169. 7:19are Shunk is because of you management
  170. 7:24management
  171. 7:25says okay we'll bite because we're going
  172. 7:28to go away we have no no choice y okay
  173. 7:31it's our fault what do we do he says
  174. 7:33it's real easy go talk to your
  175. 7:35employees and tell them the truth say
  176. 7:39you're getting ready to go away you talk
  177. 7:42to this Deming guy and he said that
  178. 7:44management is at fault for it first off
  179. 7:48they know it's Management's fault right
  180. 7:51then you ask them for help and you say
  181. 7:54to them look Deming says it's our fault
  182. 7:57we agree we think it is our fault right
  183. 8:01but we can't fix it because Deming says
  184. 8:03that employees don't make
  185. 8:05mistakes we can't fix it because if we
  186. 8:07try to fix it we'll make a mistake it's
  187. 8:09another one of our ideas so what Deming
  188. 8:11says we should do is ask you for help
  189. 8:14and if you can help us improve this
  190. 8:18Factory you'll keep your job right but
  191. 8:20if you don't if if we're g to keep
  192. 8:22fighting each other like this it's
  193. 8:24nobody's going to win and we're going to
  194. 8:25all be
  195. 8:26unemployed and so the employees said
  196. 8:29okay yeah you don't really care what we
  197. 8:31have to say and Manu says yes we do in
  198. 8:35fact come up with some ideas on how to
  199. 8:37improve the motorcycle and we will do
  200. 8:39them well the employees were skeptical
  201. 8:42and they go you won't listen try us so
  202. 8:45they came up with an idea the employees
  203. 8:47came up with an idea went to management
  204. 8:49says here's our idea and management says
  205. 8:53let's do it and employes are going what
  206. 8:57yeah sounds good let's let's Implement
  207. 9:00that let's see if that that works you
  208. 9:02mean you're going to listen to our ideas
  209. 9:04yeah yeah yeah yeah yeah and then so
  210. 9:06they came up with more ideas and more
  211. 9:08ideas and more ideas see before
  212. 9:10everybody had a tiny brain didn't they
  213. 9:12they had a mad brain they didn't get
  214. 9:14along management and and employees just
  215. 9:16buted heads and fought and had strikes
  216. 9:18and Union problems they had just it was
  217. 9:20a mess right then all of a sudden
  218. 9:23management says Hey give us your ideas
  219. 9:26and they're like they employees have the
  220. 9:27tiny little brain and then they go can
  221. 9:29actually listen to our ideas yeah yeah
  222. 9:32we'll do it and all of a sudden their
  223. 9:33brains got bigger and they got more
  224. 9:35creative and it just kept going and
  225. 9:37going and going here's a
  226. 9:40question whose ideas do you like more
  227. 9:43your own or somebody
  228. 9:47else's I like my own ideas right I I so
  229. 9:50if somebody tells you you need you like
  230. 9:52this food you know don't tell me I like
  231. 9:55you like durian no I don't like durian
  232. 9:59you love green peppers Andy no I can't
  233. 10:02stand green peppers right so somebody
  234. 10:05tells me that I no I don't but I like my
  235. 10:09own ideas so here's a question if
  236. 10:12management comes up with an idea and
  237. 10:13they shove it down your throat you're
  238. 10:14gonna go let's see if this works but
  239. 10:16it's not gonna but what if you come up
  240. 10:19with the idea and management says let's
  241. 10:20do it and it doesn't work quite so well
  242. 10:24are you going to work extra hard so you
  243. 10:25don't lose face are you going to make
  244. 10:28darn shirt that that thing works so now
  245. 10:30it's their own ideas and they're driving
  246. 10:33home and instead of driving home going I
  247. 10:35hate Harley-Davidson I hate Harley
  248. 10:37Davidson instead they're driving home
  249. 10:40saying I wonder how we can fix those
  250. 10:42motorcycles wonder how we can make stuff
  251. 10:44better because they're giving us a
  252. 10:47chance let's run with this it it changed
  253. 10:49the whole mood of the whole Company the
  254. 10:51company just changed like overnight now
  255. 10:54does Harley-Davidson make good
  256. 10:56motorcycles they make real good
  257. 10:59motorcycles don't they in fact they they
  258. 11:03were so successful in turning around
  259. 11:05Harley-Davidson management actually
  260. 11:07travels around the world providing
  261. 11:11Deming Management
  262. 11:14training because deming's dead of course
  263. 11:17this was a long time ago he's way too
  264. 11:18old he's he's dead so now
  265. 11:20Harley-Davidson actually provides
  266. 11:22Management training on deming's
  267. 11:23principles so
  268. 11:26Harley-Davidson about as American
  269. 11:28company as you can get
  270. 11:30is teaching Japanese management
  271. 11:33principles around the
  272. 11:35world which were really deming's
  273. 11:38American practices so it's like a
  274. 11:40mixture of all this stuff yeah and it
  275. 11:43worked yeah Deming Deming was a really
  276. 11:47interesting fellow so if you look at the
  277. 11:51way a typical company is structured
  278. 12:05if you look at how a typical company in
  279. 12:08the United States is
  280. 12:10structured they're structured like
  281. 12:14this right you have multiple levels of
  282. 12:19management so it's shaped like a pyramid
  283. 12:23isn't it so the person the CEO the head
  284. 12:25of the company is at the top
  285. 12:29and he likes to be up at the top because
  286. 12:31the boss gets paid better than anybody
  287. 12:34else a lot better he gets treated a lot
  288. 12:37better and the idea is he's really
  289. 12:40really smart so we want the smartest
  290. 12:43person at the top of the company and all
  291. 12:46the ideas go
  292. 12:48downhill so he comes up with ideas he's
  293. 12:51got all the good ideas all the go down
  294. 12:54here so these guys are not as smart as
  295. 12:56he
  296. 12:57is these guys aren't as smart as he is
  297. 13:00these guys aren't as smart as he is
  298. 13:02guess who's the dumbest person on this
  299. 13:06chart not entrylevel employees it's the
  300. 13:11customer yeah yeah Chevrolet Chevrolet
  301. 13:15did some research from management and
  302. 13:18management decided that you know what
  303. 13:20people really want on
  304. 13:22cars are cup
  305. 13:24holders they do people want cup holders
  306. 13:29I had a Chevy uh Chevrolet Avalanche it
  307. 13:32had eight cup
  308. 13:34holders do you need eight cup holders do
  309. 13:38you when you go car shopping you say
  310. 13:40give me lots of cup holders because I
  311. 13:42love cup
  312. 13:44holders no you don't
  313. 13:48right Toyota they they asked the
  314. 13:52customers what they wanted they said we
  315. 13:53want a car that
  316. 13:55works oh okay so my idea here is the
  317. 13:59customer's dumb customer doesn't know
  318. 14:01what they want you can you fact I know
  319. 14:04there's a steakhouse in Seattle that if
  320. 14:06you go and order a steak well done they
  321. 14:09won't serve you a well done steak so you
  322. 14:13say I like my steak well done they go no
  323. 14:15we don't do that why not because it's a
  324. 14:18bad steak and we won't sell you a bad
  325. 14:20steak but I want my steak cooked well
  326. 14:24done no we don't do it we won't we will
  327. 14:27not overcook and ruin that
  328. 14:30steak wait don't you know what you want
  329. 14:34if you want a well done steak I think
  330. 14:36you should get a well done Stak but no
  331. 14:38they they know better than you okay so
  332. 14:41in a typical company like this customer
  333. 14:44has problems they go to the first level
  334. 14:46of
  335. 14:47employee now the first level employees
  336. 14:49they're not paid very well they're
  337. 14:51stupid they're not stupid but they're
  338. 14:53treated stupid nobody listens to them
  339. 14:55they have no Authority they can't do
  340. 14:57anything even if they know it's the
  341. 14:58right answer they can't they they can do
  342. 15:00very little so then if you have trouble
  343. 15:03with the first level employee you say I
  344. 15:06speak to your boss please they speak to
  345. 15:08the manager now the manager is by
  346. 15:10definition better looking they're by
  347. 15:12definition smarter they're better paid
  348. 15:14they're none of they better paid that
  349. 15:16that's about it in real life but they
  350. 15:18got some authority to make you happy if
  351. 15:22they can't make you happy you go to the
  352. 15:24next level and you keep going all the
  353. 15:26way up to the top right so if a problem
  354. 15:30makes it all the way to the top in this
  355. 15:33organization that means there's only two
  356. 15:36possibilities one it's a big problem and
  357. 15:40only the boss can solve this
  358. 15:43problem the other is these people didn't
  359. 15:46do their
  360. 15:48jobs that's it no other answer right
  361. 15:53it's either a big problem or they didn't
  362. 15:54do their job so if you call up Amazon
  363. 15:59and you I don't know what their phone
  364. 16:00number is but you call up 1 1800 Amazon
  365. 16:04and Jeff Bezos answers the
  366. 16:07phone somebody did something wrong
  367. 16:09didn't they should Jeff Bezos be
  368. 16:11answering just random phones from Amazon
  369. 16:14no he's got to save his brain for the
  370. 16:17big important
  371. 16:19things yeah so what this does is only it
  372. 16:24it it stops the problems from going up
  373. 16:26any higher right the the problems they
  374. 16:29want to solve the problem it's because
  375. 16:30if the if the first level supervisor
  376. 16:33couldn't solve the problem and then the
  377. 16:35next level supervisor says it's an easy
  378. 16:38fix why didn't you do that they look bad
  379. 16:40don't they so what you want to do is the
  380. 16:42higher up you go you want to stop that
  381. 16:44thing from getting up to the top this
  382. 16:45gives you some problems though so we had
  383. 16:48a president of the United States his
  384. 16:50name was George HW Bush I did two
  385. 16:53projects for him I met him
  386. 16:55twice George HW Bush had been presid had
  387. 16:59been uh president of the United States
  388. 17:01for four years and he was running for
  389. 17:04reelection and he did what everybody
  390. 17:07does when they run for election or
  391. 17:09reelection they go around and Shake
  392. 17:12people's hands and say hi and kiss
  393. 17:13babies and things like that that's what
  394. 17:15they do they go and try to be nice right
  395. 17:17because remember it's a popularity
  396. 17:19contest see how see all this stuff's
  397. 17:21kind of rolling back in anyway so George
  398. 17:25Bush does does this he goes to a grocery
  399. 17:27store and he's touring the grocery store
  400. 17:30right he go he goes to the meat
  401. 17:32department says look at all these
  402. 17:33beautiful meats and then he goes to the
  403. 17:35veggies and says look at these wonderful
  404. 17:37vegetables are also pretty nice you know
  405. 17:39that's what they do right and he shakes
  406. 17:41people's hand and says whatever he
  407. 17:45says but then he goes to the checkout
  408. 17:49stand and there's a the Checker is
  409. 17:53scanning the little labels on on the on
  410. 17:57the ringing up the order right and takes
  411. 18:00a can of beans and
  412. 18:05goes that's a pretty good book isn't it
  413. 18:07sounds just like it I go to the store
  414. 18:09sometimes and I make that sound and
  415. 18:10they're like what what we
  416. 18:13overrated anyway that's that's one of my
  417. 18:15fun sounds I I I I have fun with that
  418. 18:17anyway so George Bush sees this he sees
  419. 18:22that sees this the laser scan it and
  420. 18:24makes that
  421. 18:26that and he goes oh my God
  422. 18:29look at this amazing Hightech Store look
  423. 18:32there's computers and lasers and look at
  424. 18:36all this stuff one of his his uh AIDS
  425. 18:40ran up to him says Mr President they've
  426. 18:43had these for 20
  427. 18:46years
  428. 18:47oops he didn't know what a grocery store
  429. 18:50to look like he hadn't been in a grocery
  430. 18:53store for 20
  431. 18:55years now let's be fair okay he had been
  432. 18:58president of the United States for four
  433. 19:00years does the president of the United
  434. 19:03States go grocery
  435. 19:04shopping no before that he had been Vice
  436. 19:07President of the United States for eight
  437. 19:09years does the vice president of the
  438. 19:12United States go grocery shopping no
  439. 19:15before that he was ambassador to the
  440. 19:16United Nations and the head of the CI
  441. 19:18those dudes don't go there either it had
  442. 19:20probably been over 20 years since he'd
  443. 19:23been in a grocery
  444. 19:25store wow now that's the next day Bill
  445. 19:29Clinton was running against him and Bill
  446. 19:30Clinton comes up and
  447. 19:32says I play the saxophone and my
  448. 19:36favorite food is
  449. 19:38McDonald's now wait wait a second do you
  450. 19:41really believe that this old fat dude's
  451. 19:45favorite food is McDonald's maybe I
  452. 19:47don't
  453. 19:49know
  454. 19:50but no really your favorite food is
  455. 19:55McDonald's I have a hard time with that
  456. 19:57I don't I don't believe that but why was
  457. 20:00he saying that then right because he was
  458. 20:02saying I go to McDonald's which he did
  459. 20:05go to McDonald's a lot right so he says
  460. 20:08I go I'm one of us I play the saxone
  461. 20:11this dude all he's ever done is
  462. 20:13government he doesn't know anything he
  463. 20:15doesn't even know what a grocery store
  464. 20:16looks like I go to McDonald's right and
  465. 20:18everybody says you go to McDonald's
  466. 20:21you'd probably be a lot more fun at a
  467. 20:23barbecue than George HW
  468. 20:25Bush which he would right and so he got
  469. 20:29elected wow wow so Denning says hey you
  470. 20:32got a problem with this this is a bad
  471. 20:35model in fact he says it's the worst
  472. 20:39model you can give so
  473. 20:42Denning
  474. 20:44instead says that the model should look
  475. 20:48like
  476. 20:50this he said it should be upside
  477. 20:53down right and the
  478. 20:57boss should be here at the bottom of the
  479. 21:01organization and because remember
  480. 21:04employees cannot make mistakes so what
  481. 21:06happens is these employees come up with
  482. 21:08an idea you get three employees that
  483. 21:10come up with an idea they go to the
  484. 21:13boss they say boss we got this idea the
  485. 21:17boss has two choices the boss either
  486. 21:20says yes let's do it or I need some more
  487. 21:25information the boss cannot say no why
  488. 21:29because the boss can be wrong who can't
  489. 21:32be
  490. 21:32wrong
  491. 21:35employees oh that's kind of weird isn't
  492. 21:39it yeah so he he cannot say say no so
  493. 21:42then the employees if he says no or
  494. 21:44which he's not he give me more
  495. 21:46information employees go back do some
  496. 21:48more research come back to the boss
  497. 21:50again with the same with with the new
  498. 21:52research and now the boss says two
  499. 21:55things yes or I need more information
  500. 21:58that's all now if they can't answer the
  501. 22:01question then of course that idea goes
  502. 22:03away it was a bad idea but who made that
  503. 22:05decision the employees the boss does not
  504. 22:07make the the boss doesn't say no they
  505. 22:11might say I I don't have enough
  506. 22:12information yet but they never say no
  507. 22:15because they can be wrong and they don't
  508. 22:16want to be wrong right so finally this
  509. 22:19first level boss gets enough
  510. 22:22information and says okay this sounds
  511. 22:26good I'm going to take it to my boss he
  512. 22:27takes it to his boss boss his boss has
  513. 22:29two choices right one is I need more
  514. 22:34information or the other is sounds good
  515. 22:36let me push it up to my boss that's it
  516. 22:40and then it keeps moving up and up and
  517. 22:42up and finally it gets to the head of
  518. 22:44the company and the head of the company
  519. 22:46has no choice they they they rubber
  520. 22:49stamp it they they don't make decisions
  521. 22:52like ours do so ours that the leaders
  522. 22:55make the decision not in Japan in Japan
  523. 22:58it's the it's the lower level employees
  524. 23:01that make the decisions now what does
  525. 23:04the boss do in in a Japanese company his
  526. 23:07job he only has one job his job is to
  527. 23:10make sure that these guys are well
  528. 23:12trained and taken care of that's all he
  529. 23:15cares about he wants to make sure that
  530. 23:17the he has the best employees working
  531. 23:19for him their job is to make sure that
  532. 23:21the other employees are better their job
  533. 23:23is to make sure the other everybody's
  534. 23:25happy right so he doesn't come up with
  535. 23:28the idea
  536. 23:28here this guy comes up with the ideas
  537. 23:30and they roll downhill you ever heard
  538. 23:31the phrase it rolls downhill roll
  539. 23:34downhill that's the idea here because
  540. 23:36it's the boss's idea and you got to do
  541. 23:38what the boss says right here it's the
  542. 23:41employees ideas and the boss kind of has
  543. 23:43to say yes right but it gets even more
  544. 23:47interesting because where do you think
  545. 23:50these entrylevel employees get their
  546. 23:53ideas
  547. 24:07the
  548. 24:09customer on my screen it looks like it's
  549. 24:12backwards I don't know if that's but it
  550. 24:15says that says customer okay the
  551. 24:17customer have you ever heard the phrase
  552. 24:19the customer is always
  553. 24:20right yeah that's where this came from
  554. 24:24the customer's always right well
  555. 24:26customer is not always right yes they
  556. 24:28are oh no I had had customers that are
  557. 24:32wrong no right if you go to the
  558. 24:35steakhouse and you want your steak
  559. 24:38cooked well
  560. 24:39done and they
  561. 24:41won't are you going to go back to that
  562. 24:45Steakhouse no right and and if the
  563. 24:48customer is right what do they give
  564. 24:51you money that's why you're there that's
  565. 24:55why you're doing this business is to get
  566. 24:57their money right and so if you're not
  567. 24:59giving them what they want with the
  568. 25:00service they're going to go someplace
  569. 25:01else now but the customer isn't always
  570. 25:04right it is by deming's Theory deing
  571. 25:07says that the customer knows what they
  572. 25:08want and if they don't you don't give
  573. 25:10them what they want they'll go to
  574. 25:11someplace
  575. 25:13else huh would you want to drive a car
  576. 25:17that breaks down or has cup
  577. 25:20holders sorry do you want a car that
  578. 25:22doesn't break down or car with lots of
  579. 25:24cup
  580. 25:26holders yeah
  581. 25:28yeah yeah pretty pretty crazy ideas
  582. 25:32here okay so Deming came up with this
  583. 25:35idea of of
  584. 25:37quality he says what is Quality quality
  585. 25:42is the degree a good or service meets
  586. 25:45its
  587. 25:46standards does it do what it's supposed
  588. 25:49to
  589. 25:50do you go to McDonald's is McDonald
  590. 25:53supposed to be a fine dining experience
  591. 25:55oh no right is McDonald's food supposed
  592. 25:59to be delicious and
  593. 26:02nutritious no no what is McDonald's food
  594. 26:07supposed to
  595. 26:08be Bland and
  596. 26:12consistent is it
  597. 26:14Bland yeah is it
  598. 26:16consistent yeah but once in a while they
  599. 26:18have good food once in a while they'll
  600. 26:20do it nobody buys it you don't go to
  601. 26:24McDonald's for a $12 hamburger you don't
  602. 26:27you go to Robin some other place for a
  603. 26:30$12 hamburger that's not what that's
  604. 26:32your brain doesn't say let's go to
  605. 26:33McDonald's and get a $12
  606. 26:35hamburger even if it tastes good you
  607. 26:37don't you don't buy it right so everyone
  608. 26:39well to bring back the MCB guys know
  609. 26:42love that MCB oh
  610. 26:44yeah they do it because people come in
  611. 26:46there and they they'll buy it once just
  612. 26:48because wow we got the rib back I
  613. 26:50remember that when I was a kid and then
  614. 26:52they they go they come back they never
  615. 26:54they don't buy it so what happens is
  616. 26:56they put it on the on the on the menu
  617. 26:59just for a little bit to get you to come
  618. 27:01in to try that RI yeah cuz I remember
  619. 27:03that rib and then after you've um you
  620. 27:07come in there you go I don't want that I
  621. 27:08want cheeseburger and fries and a Happy
  622. 27:11Meal and that's what they so everybody
  623. 27:14says well McDonald's is low quality it
  624. 27:16isn't does McDonald's food do what it's
  625. 27:19supposed to
  626. 27:20do are there ever any surprises when you
  627. 27:23order McDonald's food well the Happy
  628. 27:26Meal okay Happy Meal gives you a little
  629. 27:27plas pizza toy that works for the the
  630. 27:31half an hour before it breaks but yeah
  631. 27:33okay but that's what you go there
  632. 27:36for yeah yeah yeah so let's look at
  633. 27:39performance what's quality what's
  634. 27:41performance is a Ferrari a quality
  635. 27:45car yeah I Ferraris are cool right
  636. 27:49everybody loves a Ferrari if you have a
  637. 27:51Ferrari people Don this right they look
  638. 27:54really
  639. 27:55snazzy they sound really cool
  640. 27:58they go really really fast they're
  641. 28:02maneuverable they're expensive they're
  642. 28:05rare it's a great
  643. 28:08car actually Ferraris do something else
  644. 28:11really really really well in fact better
  645. 28:14than any other brand of
  646. 28:16car they break
  647. 28:18down they do per mile operating costs
  648. 28:24for maintenance and everything for a for
  649. 28:26a Ferrari
  650. 28:28is the highest per mile maintenance cost
  651. 28:31of any major car company in the world so
  652. 28:36yes they go really fast they look cool
  653. 28:38they sound neat and you're going 200
  654. 28:41miles an hour and parts are flying off
  655. 28:44your car now do you buy a Ferrari for
  656. 28:49reliability if your answer is
  657. 28:51yes you're making a big mistake because
  658. 28:54they're not very reliable cars you have
  659. 28:56to do a lot of maintenance on them right
  660. 28:59but they're cool I want one is it is it
  661. 29:02a quality C yes but they break down now
  662. 29:06Porsche Porsche
  663. 29:08911 has some similarities to the Ferrari
  664. 29:11they're cool they're
  665. 29:13fast they're actually pretty reliable
  666. 29:15too but the problem is anytime you have
  667. 29:18to do maintenance you have to take the
  668. 29:19engine out you they're what's called a
  669. 29:22boxer engine right so the Pistons are
  670. 29:24going like that and you can't work on it
  671. 29:27so what do you do so something breaks
  672. 29:29down you got to pull the engine out of
  673. 29:32the car right go to a porch the
  674. 29:34dealership say can I go to the
  675. 29:36maintenance area and they think oh yeah
  676. 29:38we'll show you the maintenance area it's
  677. 29:39beautiful because it's state-of-the-art
  678. 29:41clean beautiful nice and you'll go and
  679. 29:43you see all these engines out of the
  680. 29:45cars because that's the only way to work
  681. 29:46on them right uh is is a Porsche of a
  682. 29:50quality car it it's what pors is is
  683. 29:54about the the most U maneuverable cars
  684. 29:56out there and they don't break down very
  685. 29:59much but if you've ever ridden in a
  686. 30:02porch of 911 very far you'll find out
  687. 30:05they're terrible cars first off they're
  688. 30:08loud they are loud especially the Cabret
  689. 30:11and if you have a Cabret sounds really
  690. 30:14cool the engine sounds neat it's all a
  691. 30:15lot of fun but if you take a long trip
  692. 30:19you will damage your hearing it's that
  693. 30:21loud so you have to wear earplugs right
  694. 30:24you take a short trip you don't really
  695. 30:25notice it you take a long trip you you
  696. 30:27will wear earplugs talk to anybody who's
  697. 30:28gone on a road trip like to the Grand
  698. 30:31Dam in back in a Porsche and
  699. 30:33they'll say yes I wore earplugs so
  700. 30:35number one it's like you have to wear
  701. 30:37earplugs when you drive the car number
  702. 30:39two it's terribly uncomfortable it is
  703. 30:43not a comfortable well I sat one it was
  704. 30:45nice not for four hours you didn't so I
  705. 30:48have a a good friend and he bought a uh
  706. 30:52a boxer brand new
  707. 30:54boxer he got this the top model of the
  708. 30:57boxer
  709. 30:58and um he sold it like two months later
  710. 31:02I said ow come you sold it that was a
  711. 31:03nice car he says I love that car my back
  712. 31:06hated that car that car is so
  713. 31:08uncomfortable now is Porsche a good car
  714. 31:12yes is f a good car yes is McDonald's
  715. 31:16food terrible yes but it's they're all
  716. 31:19quality aren't they but do they do what
  717. 31:22they're supposed to
  718. 31:23do yes right you do not buy a Porche
  719. 31:28to ride around comfortably you just
  720. 31:32don't and there's a reason the seats are
  721. 31:33so uncomfortable because they want it
  722. 31:35spe real snug so when you're going
  723. 31:37around these twisty Corners you don't go
  724. 31:39sliding off the side so you can you're
  725. 31:41actually in control but that makes your
  726. 31:43back hurt
  727. 31:47so how about japanese cards which are
  728. 31:50better japanese cards or American cars
  729. 31:52now most people tell you Japanese and
  730. 31:53we'll talk about that here in a
  731. 31:56second not pickup trucks pickup trucks
  732. 32:00American pickup trucks are more reliable
  733. 32:03right Japanese pickup trucks they're
  734. 32:06they're they're they're not up to the
  735. 32:08standard of American pickup trucks so
  736. 32:10people say no Japanese trucks are so
  737. 32:12much better so I had a Ford F-150 pickup
  738. 32:16truck you know the truck right Ford
  739. 32:19F-150 pickup
  740. 32:21truck when I sold it it had 380,000
  741. 32:24miles on it when I sold it you took the
  742. 32:28key you put the key in the ignition and
  743. 32:30turn the key and it goes started right
  744. 32:33off okay it only broke down one time so
  745. 32:36yeah I changed the batteries I changed
  746. 32:38the belts I changed the tires brakes
  747. 32:40yeah yeah yeah that's maintenance stuff
  748. 32:42but mechanical breakdown it only broke
  749. 32:44down one time and the fuel pump died on
  750. 32:46it cost me $600 to get a brand new fuel
  751. 32:49pump put on put in it okay 380,000
  752. 32:55miles wow now that's a lot
  753. 32:58what you mean if I buy one I'll get that
  754. 33:00no it's called
  755. 33:01lucky right you're lucky but right now
  756. 33:05the standard is you should be able to
  757. 33:06make about quarter of a million miles on
  758. 33:09your pickup
  759. 33:12truck so Japanese cars can be better but
  760. 33:16not with pick if you look compare a Ford
  761. 33:18and a Toyota
  762. 33:20normally Toyota spanks Ford big ton but
  763. 33:24not in their pickup trucks yeah
  764. 33:32cost is something more valuable because
  765. 33:34it's
  766. 33:36expensive it's a higher quality since
  767. 33:39it's expensive do you want an expensive
  768. 33:41diamond or a cheap
  769. 33:44diamond I want an expensive one right
  770. 33:47and so you go to if you've ever gone
  771. 33:49diamond shopping they'll say oh here's
  772. 33:52the best this is a perfect Crystal it's
  773. 33:54got the highest quality with no thing
  774. 33:57and you look get it and you go okay it's
  775. 33:59a diamond right and you said well how
  776. 34:01much is that diamond they go $155,000
  777. 34:04but this is the best and go really
  778. 34:07what's a $10,000 diamond look like and
  779. 34:09they go well you don't want a $10,000
  780. 34:11Diamond you want $15,000 no don't show
  781. 34:14me the $10,000 and they bring out
  782. 34:16another diamond and you look at that
  783. 34:19that diamond and then you go see the
  784. 34:22color isn't quite as good you're looking
  785. 34:24at it you're
  786. 34:25going looks like the other one to me
  787. 34:29I don't see any difference oh yeah there
  788. 34:30is and then they pull up the original
  789. 34:32the 15,000 they put them right next to
  790. 34:35each other and they might even give you
  791. 34:36a little monacle thing to look at see
  792. 34:39there's different colors there's
  793. 34:40different okay how many times are are
  794. 34:43you're going to look at somebody's
  795. 34:44diamond on their hand and go we get out
  796. 34:47the thing let me get a color chart here
  797. 34:49to make
  798. 34:50sure you're not right you don't even I
  799. 34:53bet you if they if they had cubic
  800. 34:55zirconium next to it you wouldn't be
  801. 34:57able to tell it yeah it's a Porsche
  802. 35:02Porsche's a great car expensive still
  803. 35:05want one even though they're
  804. 35:06uncomfortable still want one so I told
  805. 35:09you I drive a Ed electric vehicle so
  806. 35:13it's a I have a a Tesla don't
  807. 35:17I not really but yes it is it's a Toyota
  808. 35:20Rav
  809. 35:214 with a on a Tesla body right so they
  810. 35:25just they put the Toyota ra 4 right on
  811. 35:27top of the the Tesla frame and Away you
  812. 35:29go right which would you rather have a
  813. 35:34Tesla or a Toyota ref
  814. 35:38for how many times do you think when I
  815. 35:42pull into the G to to the grocery store
  816. 35:45people look at my car and go oh wow
  817. 35:49that's a Toyota Tesla r
  818. 35:53or it's never happened nobody knows in
  819. 35:57fact nobody even knows it's an Eevee
  820. 35:59except it says Eevee on there and they
  821. 36:00probably think that that means something
  822. 36:02else not electrical vehicle they
  823. 36:03probably think it means Eevee is my
  824. 36:06daughter's name or something I don't
  825. 36:07know but nobody even get which would you
  826. 36:10rather have a Tesla S or Toyota Rav 4
  827. 36:14rather have the Toyota no you'd rather
  828. 36:16have the Tesla wouldn't you yeah because
  829. 36:18it costs more it's got to be better but
  830. 36:21it's a same car yeah yeah
  831. 36:28status which would you rather have
  832. 36:31Alexis or Toyota so I was getting ready
  833. 36:34to buy a car for my wife and she says I
  834. 36:37want the
  835. 36:39L for Lexus I don't know if she knew
  836. 36:42what Lexus meant but she knew what that
  837. 36:44L meant she wanted it they're both the
  838. 36:48same company right so I bought a Toyota
  839. 36:54Camry all the bells and whistles had
  840. 36:56every feat you could have on it right
  841. 36:59leather seats
  842. 37:01everything uh I paid $30,000 for that
  843. 37:03car okay now uh you say you paid $30,000
  844. 37:08for a toy on Camry this was a long time
  845. 37:10ago and back then Camry was more
  846. 37:12expensive especially with all these toys
  847. 37:15okay so what do you do when you buy a
  848. 37:18car what's the first thing you do when
  849. 37:21you buy a car on the weekend we take it
  850. 37:24for a road trip it's what you do isn't
  851. 37:27it here you're going to take it for a
  852. 37:28drive and goooo look at my car right so
  853. 37:30I took it on a road trip and I went up
  854. 37:32to uh
  855. 37:34lenworth and because it's a pretty drive
  856. 37:36and nice and I pull into leworth and get
  857. 37:40out of my car because I'm gonna go get
  858. 37:42lunch get out of my car I lock the door
  859. 37:44lock the car I'm walking to the
  860. 37:49restaurant what do you do when you have
  861. 37:51a brand new car you're on a road trip
  862. 37:55you just park your car lock it
  863. 37:58you're walking to the restaurant what do
  864. 38:00you
  865. 38:02do you turn around and look at your car
  866. 38:06that's what you do right you go that's
  867. 38:08my car so I looked at looked at my car I
  868. 38:12yeah that's my car and my wife looks at
  869. 38:14the car and she
  870. 38:15says look at that I go what she says
  871. 38:19look I go it's our car she says no look
  872. 38:22at look at the car next to it but it was
  873. 38:25the same car me r back when we looked in
  874. 38:28this car this car was the exact same car
  875. 38:32could not tell a difference except they
  876. 38:36misspelled Toyota they spelled it
  877. 38:40Lexus and instead of having that funky T
  878. 38:44all over the place it had an L all over
  879. 38:46the place that was it everything was
  880. 38:49identical there was no difference how
  881. 38:50much do you think they paid extra to
  882. 38:53misspell
  883. 38:56Toyota
  884. 38:58$110,000 probably so do you know Honda
  885. 39:02they sometimes they misspell Honda too
  886. 39:09Acura sometimes they misspelled
  887. 39:13Nissan
  888. 39:17Infinity yeah so wow status I've got an
  889. 39:20Infinity you got a Nissan look at your I
  890. 39:24got an Infinity it's the same car uh and
  891. 39:26what's weird Toyotas are actually more
  892. 39:28reliable than the
  893. 39:30Lexus it depends on how you how you
  894. 39:33evaluate that and I'll give you those
  895. 39:34data that data in little bit so how
  896. 39:36about features more features something
  897. 39:38has the better it is right so if you
  898. 39:41ever go to
  899. 39:42a uh Walmart and you want to buy a
  900. 39:49blender you go buy a Walmart blender and
  901. 39:51it's cost let's say it's $30 to buy a
  902. 39:54Walmart
  903. 39:55blender and that blender
  904. 39:58has about 25 different
  905. 40:00speeds right so you
  906. 40:02can or buttons and you press it or
  907. 40:05whatever you know what a blender
  908. 40:08is you want to buy a $200 blender or a
  909. 40:12$500 blender they usually have one or
  910. 40:15two speeds realistically do you use all
  911. 40:19those speeds no you know used to have uh
  912. 40:24VCRs people used to record movies
  913. 40:26because they couldn't before he had the
  914. 40:28internet they have to record nobody knew
  915. 40:30how to how to record a show on time or
  916. 40:33you did and then record half of the show
  917. 40:35and you missed it it was it was a big
  918. 40:36mess you didn't want Cadillac so
  919. 40:39Cadillac luxury cars right or nice cars
  920. 40:42Cadillac decided we're going to put a
  921. 40:45lot of features on we're going to make
  922. 40:46this car just absolutely incredible to
  923. 40:49drive we're going to put something
  924. 40:50called heads up display on it so instead
  925. 40:53of looking down at the needle to see how
  926. 40:54fast you're going it will project it on
  927. 40:56your windshield for you just like they
  928. 40:59do for fighter
  929. 41:00jets so fighter jets you when you're
  930. 41:03zipping around you don't want to be 's
  931. 41:05this right so they they put it up on the
  932. 41:07display so tells you so wow they onboard
  933. 41:10computers they when you get it in you
  934. 41:12didn't use a
  935. 41:13key no yet you pressed your code in on
  936. 41:17the door they were the first ones to
  937. 41:18come up with this code thing you press
  938. 41:20the codes on the door then your code is
  939. 41:22different than your spouse's code so
  940. 41:24when you press in your code the card
  941. 41:27seat would automatically adjust to the
  942. 41:30way that you like it the temperature
  943. 41:33would be turned to the temperature you
  944. 41:34like they would change the radio station
  945. 41:37to your favorite radio station it would
  946. 41:39adjust the mirrors all automatic for
  947. 41:43you it was an amazing car for the time
  948. 41:47right people hated that thing so what's
  949. 41:51weird about Cadillac Cadillac owners are
  950. 41:54very loyal if you buy one Cadillac
  951. 41:57you were going to buy another and
  952. 41:59another and another that's just the way
  953. 42:02Cadillacs work that Cadillac people are
  954. 42:05very loyal they came out with this car
  955. 42:07and people start stopped buying
  956. 42:10Cadillacs and they said they couldn't
  957. 42:11figure this out so thank goodness they
  958. 42:13were smart they went to their customers
  959. 42:15and they said why aren't you buying this
  960. 42:18new car this is a great car now let's
  961. 42:20think about a Cadillac owner a typical
  962. 42:23Cadillac
  963. 42:25owner there's one word that you can use
  964. 42:29to describe a typical Cadillac
  965. 42:34owner
  966. 42:36older older people typically buy
  967. 42:41Cadillacs now does an old
  968. 42:44person want to be flooded with
  969. 42:46technology and gadgets and stuff like
  970. 42:49that and want to program a computer just
  971. 42:52to go to the store to buy a quart of
  972. 42:54milk
  973. 42:58no so Cadillac ended up throwing all
  974. 43:02that stuff
  975. 43:04away they they just said it really
  976. 43:07wasn't because people were just freaked
  977. 43:08out haven't you had something that's way
  978. 43:10too complicated so I have some friends
  979. 43:12and then they live in a very large house
  980. 43:14and they have
  981. 43:16a a radio system that's built into the
  982. 43:19house right so you can change the radio
  983. 43:22station anywhere you want in the house
  984. 43:25and you you can also change other rooms
  985. 43:27so if if they're over in the kitchen and
  986. 43:31I'm in the living room I could make them
  987. 43:33listen to country music or rock and roll
  988. 43:36or Bluegrass but so you can control
  989. 43:39everything from
  990. 43:41everywhere
  991. 43:42well they bought this house and this
  992. 43:44house is about 20 years
  993. 43:47old nobody can figure out how to work
  994. 43:50it every room has one of these really
  995. 43:52super
  996. 43:551990 early 1990s consoles on the wall
  997. 44:00with all these buttons and gizmos and
  998. 44:03stuff the family cannot figure it out so
  999. 44:06then the family hired an
  1000. 44:08electrician electrician comes in and
  1001. 44:11says no clue they said well who could
  1002. 44:15help us fix get this to work and they
  1003. 44:18said I don't think anybody
  1004. 44:22can so they end had put radios in every
  1005. 44:24room I mean wow
  1006. 44:29but it looks cool
  1007. 44:32yeah
  1008. 44:34reliability so a lot of people in in
  1009. 44:37watching this
  1010. 44:38video Drive Hondas Honda's a good car
  1011. 44:41right nobody's going to tell you Honda's
  1012. 44:43bad car Toyota is more reliable it is
  1013. 44:46Toyota and I'll give you the stats here
  1014. 44:48in a second because people like to say
  1015. 44:49no it's not but the people who drive
  1016. 44:53Hondas have a reason okay first off
  1017. 44:57Toyota is more reliable not much this
  1018. 44:59much but they are more reliable the
  1019. 45:01operating costs on the Toyota are lower
  1020. 45:04Honda's quite often you have to have
  1021. 45:05premium gas Toyotas you're not supposed
  1022. 45:07to put premium gas in and no premium gas
  1023. 45:09does not give you better gas mileage or
  1024. 45:11make your car go any faster
  1025. 45:13or it's not also Hondas have engines
  1026. 45:18tend tend to have what's called a uh
  1027. 45:20zero clearance valve which means the
  1028. 45:24Piston comes up and the valve
  1029. 45:28closes but if the valve if if the the
  1030. 45:32valve train if the uh the cam shaft
  1031. 45:35breaks or so gets out of syn then the
  1032. 45:37Piston will hit the valve and bend it
  1033. 45:39and break it so you there's more
  1034. 45:41maintenance on The
  1035. 45:43Hondas so but why would you drive a
  1036. 45:45Honda if Toyota is more reliable is
  1037. 45:49cheaper to operate is for there's a good
  1038. 45:52reason there's a real good reason why
  1039. 45:53you're drive Honda because a lot of
  1040. 45:55people say Hondas look
  1041. 45:57better do you look at a Toyota Prius and
  1042. 46:00go oh look at that hot machine better
  1043. 46:03yet look go go look at a 1995 or 2000
  1044. 46:07maybe that's when they came out go look
  1045. 46:09at like the first model of the
  1046. 46:12Prius that is one of the ugliest cars
  1047. 46:16known to mankind a lot of people say I'm
  1048. 46:20not going to drive that car because it
  1049. 46:21is just so ugly you want a pretty car or
  1050. 46:23an ugly car I want a pretty one so
  1051. 46:25people with the Hondas they look cooler
  1052. 46:28right they you don't look at them
  1053. 46:31go with with one exception the older
  1054. 46:33Honda insights were pretty ugly yeah but
  1055. 46:37I got a Volkswagen sorry for your
  1056. 46:40Volkswagen no Volkswagen's a good car no
  1057. 46:44it's it's not all right a typical
  1058. 46:46eight-year-old Volkswagen has three
  1059. 46:50times as many problems as a
  1060. 46:53Toyota three times
  1061. 46:57well I got a Volkswagen and it hasn't
  1062. 46:59broken down huh you know what that
  1063. 47:04what's that word
  1064. 47:06lucky so when I had my for F-150 with
  1065. 47:10380,000 mil it never broke down Fords
  1066. 47:13don't break down uh
  1067. 47:16lucky yeah so I I don't believe you okay
  1068. 47:20nobody believes me let's get some
  1069. 47:23statistics going
  1070. 47:25here so this
  1071. 47:27is vehicle class Quality Index
  1072. 47:31ratings so you see number one is
  1073. 47:35Toyota number two is
  1074. 47:39Toyota number three Hummer I don't
  1075. 47:42understand how Hummer got that uh I
  1076. 47:44don't know how that's working although
  1077. 47:46Hummer's GNA come out with an
  1078. 47:48EV yeah Hummer of all vehicles is going
  1079. 47:51to be
  1080. 47:53green okay Porsche hey we knew Porsche
  1081. 47:58yeah Scion what's Scion that's oh that's
  1082. 48:01Toyota again isn't it but they're doing
  1083. 48:03away with Scion but he got sign W
  1084. 48:07mercedesbenz okay Infinity Nissan Honda
  1085. 48:12wow where's
  1086. 48:16[Music]
  1087. 48:19Volkswagen
  1088. 48:20wow so any standard but when you when
  1089. 48:24you go look at at index
  1090. 48:27uh on cars okay first off Mini
  1091. 48:31Cooper who makes Mini
  1092. 48:35Cooper
  1093. 48:38mercedesbenz oh now that's interesting
  1094. 48:40isn't it I think it's
  1095. 48:42Mercedes-Benz either Mercedes-Benz or
  1096. 48:45BMW I'm pretty sure it's Mercedes-Benz
  1097. 48:47okay
  1098. 48:49okay smart smart car isn't smart right
  1099. 48:53those that's with the little two-seater
  1100. 48:55cars where you sit right next to each
  1101. 48:56other and you can either parallel park
  1102. 48:57or back in they don't work Fiat Fiat
  1103. 49:01always has troubles right fiat's always
  1104. 49:04these three are always there at the top
  1105. 49:07and Volks that's number one worst right
  1106. 49:10U Volkswagen's always really really
  1107. 49:13close too so let's look at at some other
  1108. 49:16interesting
  1109. 49:20statistics now this
  1110. 49:22is move this up there we go long
  1111. 49:26long-term Quality Index percentage of
  1112. 49:29vehicles over 180,000 miles so in other
  1113. 49:31words these are the cars that last
  1114. 49:34forever who's number
  1115. 49:37one
  1116. 49:38Toyota who's number two Honda who's
  1117. 49:43number three Honda who's number four
  1118. 49:50Toyota yeah where's VW
  1119. 49:57yeah now first off it gets this this
  1120. 50:02these numbers are a little interesting
  1121. 50:03here so
  1122. 50:05oldmobile olds Mobile's way up there
  1123. 50:08isn't it yeah yeah Oldsmobile they're
  1124. 50:11great
  1125. 50:12card old mobiles have some problems
  1126. 50:15they're not the best car but think about
  1127. 50:17it what type of person buys an old
  1128. 50:23mobile an old person
  1129. 50:27now how do old people drive their
  1130. 50:30cars like you Andy shut
  1131. 50:34up how do old people D they go slowly
  1132. 50:37don't they and they don't go racing
  1133. 50:40around or anything they're going let's
  1134. 50:42turn that turn signal on and make sure
  1135. 50:45there's nobody coming right and you know
  1136. 50:48what I'm talking about right they last
  1137. 50:51they keep them parked under a garage and
  1138. 50:53they last forever and they okay so
  1139. 50:56that's kind of that's kind of
  1140. 50:58interesting on them now look though look
  1141. 51:01at look let's look at the bottom again
  1142. 51:03smart not smart Fiat no mini bad
  1143. 51:10Porsche wait I thought Porsches were
  1144. 51:14pretty darn reliable and pretty good car
  1145. 51:16they
  1146. 51:17are then why is Porsches so far down
  1147. 51:21there first the repairs on a Porsche are
  1148. 51:25insanely expensive
  1149. 51:27you you're going to you spend a lot of
  1150. 51:30money on maintenance and especially the
  1151. 51:31older ones and how many people in here
  1152. 51:34how many people watching the video have
  1153. 51:37gone to somebody else's
  1154. 51:38house and gone to their garage and seen
  1155. 51:42a Porsche that hasn't probably been
  1156. 51:44turned on in the last nine years you
  1157. 51:48know what I'm talking about it's a it's
  1158. 51:49a a garage Queen it lives in the garage
  1159. 51:52and they only drive it on Sunny pretty
  1160. 51:54days once in a great while
  1161. 51:57and because operating costs are so high
  1162. 51:59and they just they keep them there
  1163. 52:03Jaguar actually Jaguars aren't very
  1164. 52:06reliable they're pretty cars but they're
  1165. 52:09uh and they're expensive but they're
  1166. 52:11they don't last very long ago I I heard
  1167. 52:13that this one guy bought a Jaguar not
  1168. 52:15very long ago and he drove it across the
  1169. 52:18country and it only caught on fire twice
  1170. 52:21so
  1171. 52:24yeah so
  1172. 52:27but Andy JD Powers JD Powers says
  1173. 52:31initial quality Volkswagen and Toyota
  1174. 52:34are just as good as each
  1175. 52:36other
  1176. 52:38well yes and no no JD pow says that
  1177. 52:42Honda and Toyota and Volkswagen are all
  1178. 52:45have the same initial quality so this is
  1179. 52:47where it gets kind of weird because I
  1180. 52:48showed you those re I showed you some
  1181. 52:50resources there and it said that
  1182. 52:52Volkswagen's way down there and he said
  1183. 52:54JD Power says Volkswagen's really
  1184. 52:57and we're not even talking about that
  1185. 52:58emission Scandal that almost bankrupted
  1186. 53:02Volkswagen so how can they how can JD
  1187. 53:05Powers must be wrong no JD Powers is not
  1188. 53:07wrong they're right here's what
  1189. 53:12happens JD Powers buys a
  1190. 53:15car they take the car
  1191. 53:19apart they measure all the
  1192. 53:22pieces and if the car
  1193. 53:28has
  1194. 53:3199.999 66% of the parts are defect
  1195. 53:36free it's considered
  1196. 53:39perfect you have ever take a statistics
  1197. 53:41class that's going to be called a Six
  1198. 53:43Sigma limits so if you have a little
  1199. 53:45bell curve bell curve that would say
  1200. 53:49that and you looked at a part so let's
  1201. 53:53look at a part for a bolt
  1202. 53:57let's say a bolt let's say the
  1203. 53:59specifications for the
  1204. 54:03bolt here's a
  1205. 54:09bolt so they say the specifications this
  1206. 54:13bolt should
  1207. 54:16be 3 in Long right so they want the bolt
  1208. 54:20to be three inches long there's a
  1209. 54:24problem a bolt can never ever ever be
  1210. 54:29three inches long it can't by definition
  1211. 54:34because a bolt is made out of metal and
  1212. 54:38what does metal do when it gets warmer
  1213. 54:41it expands what does metal do when it
  1214. 54:43gets colder it contracts so there's no
  1215. 54:47such thing as a perfect perfect perfect
  1216. 54:513-in
  1217. 54:53bolt so what they'll do is they'll say
  1218. 54:56okay
  1219. 54:57we want this bolt to be 3 in plus or
  1220. 55:00minus 01 so one tenth of an inch let's
  1221. 55:05just say that that number okay so if
  1222. 55:09it's
  1223. 55:133.01 sorry a 100th of an inch okay let's
  1224. 55:16say 100th 3.01 inches long it's within
  1225. 55:19standards it falls within the six sign
  1226. 55:21limits if it's less it falls in right so
  1227. 55:23it it it goes in so both Volkswagen
  1228. 55:27Toyota and Honda all have n they have
  1229. 55:32the same initial quality because they
  1230. 55:33both have
  1231. 55:3599.99999
  1232. 55:3766% are within
  1233. 55:40specifications and if I if we plot
  1234. 55:46this on a chart
  1235. 55:59if we put it on a chart so this
  1236. 56:02is this is 3 Ines this is minus .3 and
  1237. 56:06plus sorry minus .1 and plus minus .01
  1238. 56:11and
  1239. 56:12plus1 turns out that 99.999 66 are
  1240. 56:16within the limits and it's considered
  1241. 56:18perfect okay Mak sense this is what it
  1242. 56:22looks like at Volkswagen
  1243. 56:27this is what Honda and
  1244. 56:31Toyota's chart looks
  1245. 56:35like looks different doesn't
  1246. 56:38it yeah yeah see
  1247. 56:40Volkswagen management is in charge of
  1248. 56:43quality control so at Volkswagen the
  1249. 56:47boss walks around with tape measure and
  1250. 56:52calibers and a chart and he measures the
  1251. 56:55parts as are coming off and if something
  1252. 56:58is not something is defective it's the
  1253. 57:01boss's
  1254. 57:02fault okay Honda
  1255. 57:06Toyota management says to the
  1256. 57:09employees you're in charge of quality
  1257. 57:14and we want you to make it as perfect as
  1258. 57:17you can so the employees at Honda and
  1259. 57:21Toyota they say make it you want it as
  1260. 57:23perfect as you can yes management at
  1261. 57:27Volkswagen says get it within its
  1262. 57:30standards make sure every part is within
  1263. 57:32its
  1264. 57:33standards and we're going to measure the
  1265. 57:35standards right so it's perfect if it's
  1266. 57:38a little bit longer or a little bit
  1267. 57:40shorter as long as it's not too much
  1268. 57:41it's perfect versus Toyota and Honda
  1269. 57:44they say make it as perfect as you can
  1270. 57:47get it so the employees are actually
  1271. 57:49responsible for it so so okay so what
  1272. 57:52does this make a difference because
  1273. 57:56if you take a bolt so we got a bolt here
  1274. 58:01okay and you put a bolt in
  1275. 58:05a in into an engine block or something
  1276. 58:08like that okay and you tighten it up if
  1277. 58:10did you know that if you don't tighten
  1278. 58:11up the bolt if you leave it Loose it'll
  1279. 58:14vibrate won't it and when it vibrates
  1280. 58:16that causes the the strength of the
  1281. 58:21steel to get it's called embrittlement
  1282. 58:23it causes it to get really really hard
  1283. 58:27and very delicate and breaks very
  1284. 58:29easily so think of it this way let's say
  1285. 58:31you take a
  1286. 58:33pencil okay take a pencil and you go
  1287. 58:36like this with a pencil and at first
  1288. 58:40it's kind of hard and you break it
  1289. 58:41you'll just break a little bit at a time
  1290. 58:42just after you do this a little while it
  1291. 58:45gets pretty all a sudden you can go and
  1292. 58:47it will break apart won't it so the
  1293. 58:51Volkswagen the parts have a little bit
  1294. 58:53more wiggle room with it they're not
  1295. 58:56locked in so they it flexes a little bit
  1296. 59:00and so as it flexes it causes the parts
  1297. 59:03to start to wear at to wear faster and
  1298. 59:06to break more
  1299. 59:07easily Volkswagen sorry
  1300. 59:11Toyota it's locked in right if you go to
  1301. 59:15you want to have have some fun go to a
  1302. 59:18Toyota dealership look at a Toyota have
  1303. 59:21them lift the hood up start the engine
  1304. 59:23and put your hand on the engine
  1305. 59:27then go to a Volkswagen dealership find
  1306. 59:30a similar car so because you can't take
  1307. 59:33a pickup truck and compare that to a
  1308. 59:37two-seater car right get a similar car
  1309. 59:40turn on the engine and touch the
  1310. 59:43engine and you'll find that the Toyota
  1311. 59:45is going to be is going to be quieter
  1312. 59:47and it's not going to vibrate as much
  1313. 59:49and that's why it lasts longer not the
  1314. 59:52quietness but the vibration
  1315. 59:57wow pretty fun so this is all Deming
  1316. 1:00:00stuff he came up with all these
  1317. 1:00:03ideas then he also came up with this
  1318. 1:00:05idea called economies of
  1319. 1:00:08scale economies of scale economies of
  1320. 1:00:12scale means that the more you produce
  1321. 1:00:14the more efficient you
  1322. 1:00:16get okay so let's say for instance
  1323. 1:00:19you're going to make
  1324. 1:00:21cookies you make one cookie at a
  1325. 1:00:24time you not very efficient are you if
  1326. 1:00:28you make 10 cookies at a time are you
  1327. 1:00:30going to be more
  1328. 1:00:32efficient yes right so he says as you go
  1329. 1:00:35from one cookie at a time to two cookies
  1330. 1:00:37at a time to 10 cookies at a time to 100
  1331. 1:00:41cookies at a time you become more
  1332. 1:00:44efficient that's called economies of
  1333. 1:00:48scale meaning but better you
  1334. 1:00:51do so and and and that makes a lot of
  1335. 1:00:54sense everybody understands economy a
  1336. 1:00:56scale right it's more efficient to do
  1337. 1:00:59something is it more efficient when
  1338. 1:01:00you're unloading your car with groceries
  1339. 1:01:02to carry one bag of groceries or two
  1340. 1:01:04bags of groceries more efficient with
  1341. 1:01:06two that's economies of scale it gets
  1342. 1:01:10weird though let's say you can
  1343. 1:01:14physically
  1344. 1:01:16carry let's say you can physically make
  1345. 1:01:19100 cookies in an hour if everything's
  1346. 1:01:22perfect you're zoned in you're working
  1347. 1:01:25as fast as hard as you can you can make
  1348. 1:01:28100 cookies in an
  1349. 1:01:31hour how many cookies should you
  1350. 1:01:35make now most people would say 100 no
  1351. 1:01:40Deming says you should make
  1352. 1:01:4380 Deming says after 80% of capacity you
  1353. 1:01:49start to become less
  1354. 1:01:52efficient think of it this way
  1355. 1:01:55race cars do race cars engines last very
  1356. 1:02:00long A lot of times they throw those
  1357. 1:02:02engines away after One race why because
  1358. 1:02:06they're running at 100% aren't they
  1359. 1:02:09right what if they took your race car
  1360. 1:02:11engine and you didn't go 220 miles an
  1361. 1:02:14hour what if you only went 70 miles an
  1362. 1:02:16hour is the engine going to last longer
  1363. 1:02:20a lot
  1364. 1:02:21longer okay so let's say you're racing
  1365. 1:02:25you're you're going to in a
  1366. 1:02:27race and when I was in college I could
  1367. 1:02:30actually do a FIV minute mile okay
  1368. 1:02:32you're sprinting the whole time five
  1369. 1:02:34minute mile right now I don't know if I
  1370. 1:02:35can drive a five minute mile but I could
  1371. 1:02:38run it back then okay let's say I need
  1372. 1:02:41to to so I can do one five minute mile
  1373. 1:02:43I'm killing myself I'm out of breath I'm
  1374. 1:02:45completely so what if I have to run two
  1375. 1:02:48miles should I try to run two five
  1376. 1:02:51minute miles oh no I could barely do the
  1377. 1:02:55one five minut Mile and I was I was like
  1378. 1:02:57almost throw up after I was finished you
  1379. 1:02:59know what I'm talking about right but if
  1380. 1:03:01I tried to do two I there's no way I
  1381. 1:03:03could could do that right so how can I
  1382. 1:03:06if I have to go two miles what should I
  1383. 1:03:09do I should slow down shouldn't I yeah
  1384. 1:03:13so if I slow down I'm GNA be more
  1385. 1:03:16efficient so what happens is a lot of
  1386. 1:03:18companies a lot of factories they
  1387. 1:03:20say we got we want to operate at
  1388. 1:03:24100% you don't want to operate at 100%
  1389. 1:03:27so let's say you have a th
  1390. 1:03:30employees in your
  1391. 1:03:33factory you need a th employees at your
  1392. 1:03:36factory to operate at 100% what's the
  1393. 1:03:39possibility all 1,000 people are going
  1394. 1:03:42to show up on any
  1395. 1:03:44day like zero somebody gets sick
  1396. 1:03:47somebody gets married somebody has a kid
  1397. 1:03:49what you know what I'm talking about
  1398. 1:03:51right so to have a thousand people show
  1399. 1:03:54up I
  1400. 1:03:57guaranteed I need about
  1401. 1:03:59,200 1,300 people
  1402. 1:04:03employed okay so we'll we'll hire those
  1403. 1:04:05extra 300 people okay what
  1404. 1:04:09if 200 of those extra 300 that we hired
  1405. 1:04:13just show up on the on a day now we got
  1406. 1:04:161,200 people what do we do with these
  1407. 1:04:17200 people there's nothing to do with
  1408. 1:04:19them we tell them to sweep the it's
  1409. 1:04:21inefficient isn't it so Deming came up
  1410. 1:04:24with the idea he says you hire a
  1411. 1:04:26thousand people but be happy with 80% of
  1412. 1:04:30capacity Boeing Boeing decided that they
  1413. 1:04:33wanted to operate at
  1414. 1:04:35120% capacity a number of years
  1415. 1:04:38ago so how do you operate at 120%
  1416. 1:04:42capacity well they wanted to because
  1417. 1:04:44they wanted to beat Airbus as far as
  1418. 1:04:46production who they were having a big
  1419. 1:04:48fight with Airbus who could produce the
  1420. 1:04:49most planes and so they said we're going
  1421. 1:04:51to go 120% well you can sure it's called
  1422. 1:04:54mandatory overtime
  1423. 1:04:57so in people normally would work eight
  1424. 1:04:59hour shifts no now they have to work 10
  1425. 1:05:03hour shifts well that's not so bad they
  1426. 1:05:06get double time yeah but do you want to
  1427. 1:05:09work 10 hours every day all day oh the
  1428. 1:05:12weekends weekends we'll give you a break
  1429. 1:05:14on weekends you only have to work eight
  1430. 1:05:16hours on the weekends Thanksgiving
  1431. 1:05:19Day you are coming in on Thanksgiving
  1432. 1:05:22day we'll we'll pay you eight we want
  1433. 1:05:23you here eight hours for Thanksgiving
  1434. 1:05:25eat a late
  1435. 1:05:27dinner okay now do you want to fly on an
  1436. 1:05:31airplane that's built by forced labor on
  1437. 1:05:36Thanksgiving what's your brain GNA be
  1438. 1:05:38like your your whole family is home
  1439. 1:05:40eating turkey and stuffing and having a
  1440. 1:05:43ball and you're twisting a bolt on an
  1441. 1:05:46airplane you're like going I want to be
  1442. 1:05:49home yeah and you haven't had any time
  1443. 1:05:51off for so that's really dumb it's a bad
  1444. 1:05:54idea so Deming would said scale it back
  1445. 1:05:56to 80 that's what you should do so
  1446. 1:05:59that's called economies of
  1447. 1:06:04scale so next video next time you see
  1448. 1:06:10me I'm going to look
  1449. 1:06:13different and I'll show you how later
  1450. 1:06:16thanks have a good evening

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