Deming’s Quality Management Practices by Small Businesses in Rural Areas

. Deming's Philosophy is a famous thought among Quality Management scholars and practitioner. The theory consists of 14 principles providing guidelines for appropriate firms' quality behavior and practices. Deming proposes that an organization shall experience high-quality service by lowering non-value added activities, such as scrap, rework, and conflicts, while increasing customers' loyalty. There is an overwhelming allegation on the apparent effect of Deming's theory on quality management theory and practices worldwide, mostly in larger organizations of developed countries. Few studies have discussed the relevance of Deming theories in small business management practices in developing countries. Moreover, there is a stigma among small business practitioners that all western originated management theories are less applicable in their context. At the same time, the currently available literature on Deming management methods is mostly a description of the 14 points. This study aims at elaborating the small businesses owners'/ managers' understanding of Deming's fourteen points. The rising numbers of Small Medium Enterprises in Indonesia is a positive sign of local economic development in the Industrial revolution 4.0. To remain competitive, SMEs are forced to be a quality focus and consistently innovate. The sample of the study was 335 SMEs’ owners/ managers in Banyumas Central Java, Indonesia. Authors used descriptive statistics to analyze the data — results based on descriptive analysis. The result of the study confirmed the practics of Deming's theory among SMEs in Indonesia. Majority of respondents had a good understanding of the theory and felt the benefits of the theory while adopting it.


INTRODUCTION
Continues improvement is being given more significant consideration in portion by the inherent nature of global competition, which is driven by advances in consumer value and system (Adi, Wihuda, & Adawiyah, 2017;Hari Adi & Adawiyah, 2018).Therefore, small firms should consistently improve the quality of products and services offered.Continuous improvement connects higher value to lower expenses and more significant market share (meaning more fulfilled and faithful clients) and offers the rationale for ongoing performance changes to organizations (Adawiyah, Pramuka, Najmudin, & Jati, 2015; Anderson, Rungtusanatham, & Schroeder, 1994).Consistently, continuous improvement implies higher performance with less variety, resulting from process management methods that take about incremental changes and innovations in procedures, products, and facilities (Anderson et al., 1994).Some studies over the years demonstrate that implementing quality management enables companies to improve their product or service quality systematically and sustainably.(see for example Adawiyah, Shariff, Saud, and Mokhtar 2011, Ahire, Landeros and Golhar 1995; Easton andJarrell, 1998, Hendricks andSinghal 1996;Powell 1995;Yasir, Pervaiz, and Saifur, 2014 ) .The organization can adjust to the evolving setting in which it is currently active and maintain the dynamic edge (Huang and Lai, 2014, Kathleen, McFadden, Lee, Gowen III & Sharp (2014).Research results indeed promote the view that proper quality implementation is associated with creative procedures and goods (Kim, Kumar and Kumar 2012, Kathleen et al., 2014).
Although the Deming leadership technique has an impact on leadership practices, worldwide, empirical study assistance for its efficacy except for total proof is little (Anderson et al., 1994).This is partly because of the concept of depicting, explaining, and anticipating the effect of Deming leadership.The technique that was not submitted would be the direct advancement of the empirical investigator.In reality, the academic focus on Deming leadership was remarkably limited (Gartner & Naughton, 1988); this has still been comparatively unexplored for its position in formalizing and promoting the governance hypothesis.
The quality management frameworks can broadly be classified into three groups: 1) formal and quasi standards such as ISO 9000; 2) academic-research-based empirically validated models; and 3) road maps proposed by prominent gurus such as W. Edwards Deming, Joseph Juran, and Philip Crosby (Singh, Dean, and Chuong, 2013) .Management in many companies in the US and around the world embraces the Deming method (Hodgson, 1987).Its popularity is of various case studies that attributed the influence of the Deming method of managing organization (Anderson, Rungtusanatham, & Schroeder, 1994;Douglas & Fredendall, 2004;Khan, 2010).
This paper provides a model of system dynamics to demonstrate some of the elements of the Profound Knowledge System of Deming.It would act as a pedagogical instrument as a helpful guide to Deming's concepts for those fresh ones.Deming a knowledge system would direct people to new leadership from the 'Tyranny' of contemporary leadership (Deming, 1986).The scheme consists of four components (appreciation for systems, knowledge about variation, the theory of knowledge, and psychology) and emphasizes interconnection components.This study also presents how SMEs apply quality management based on W. Edwards Deming theory.

Deming's System of Profound Knowledge
Deming defined by the System of Profound Knowledge that gives insight into the transformation method of organizations.System of Profound Knowledge 's main topic is to undergo a conversion of the prevalent management style.The system consists of four interdependent components.The first component is an assessment of the scheme and the systems.A scheme is an organization that works together to attain organizational objectives.Managers must understand the links between all subsystems and individuals working in order to operate every scheme.
The comparison of the variance hypothesis is the second component of Deming's' theory.There are many causes of variability in the manufacturing method.It is not possible to understand the complicated relationship between materials, tools, machines, operators, and atmosphere differences between isolated bases.However, there is a statistical examination of the mixed impact of all different causes.Deming's second aspect of Profound Knowledge, "understanding of the variety," relates to not only recognizing and operating with variety.The checked performance is, according to Shewhart (1931 ), variable value and unidentified and fortunate triggers, as a result.Multiple schemes and complicated communication between these themes often affect performance.
The following aspect of Deming's System of Profound Knowledge is information theory, a philosophy that deals with the premises, essence, and extent of information.
Deming is stressed that it can not create a theory.Managers are responsible for learning hypothesis and applying it.Psychology is the last component of the System of Profound Knowledge.Psychology enables executives to comprehend individuals.Managers must acknowledge and use psychologists to guarantee the beneficial inherent characteristics of each individual.The 14 leadership points of Deming's System of Profound Knowledge follows.

Deming's Fourteen Points
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SMEs in Indonesia
Small and Medium Enterprises in Indonesia began to be regulated based on the Presidential Decree Number: 96 of 1993.The Decree implies that the Ministry of Cooperatives in Indonesia is responsible for fostering small entrepreneurs.Small business is considered as an influential founder of the nation's economy due to their agility.Beyond that, the mushrooming of small businesses in Indonesia help reducing poverty through job creation.
The total number of registered small businesses in Indonesia have reached a figure of 4.076 billion.The development of SMEs in Indonesia is also evidenced by the increasing amount of loans channeled to small businesses.

Fig. 1. Characteristics of respondents based on the type of business
While the number of respondents based on business age range <1 year with a percentage of 5 % or as many as 16 respondents, followed by a range of business ages 1-5 years ( 156 %), as many as 156 respondents, business age range 6-10 years ( 16%) as much 52 respondents, age range effort 11-15 years old (10 %) of 35 respondents, and the age of the business more than 15 years ( 23 %) of 76 respondents , as displayed in figure 2.

Fig. 2. Characteristics of respondents based on business age
Based on the number of employees, the highest number of employees in UMKM respondents was <10 employees, namely 231 respondents ( 69 %).The number of employees 10-25 people occupies the second largest number with 81 respondents ( 24%), followed by the number of employees 26-50 people (6 %), and finally the number of employees> people only 3 people ( 1 %).For more details, can be seen in Figure 3 below.

Fig. 3. Characteristics of respondents based on the number of employees
Based on monthly turnover, the most massive turnover of MSME respondents is> 100 million, which is 36 respondents ( 11 %).The total turnover of 51-50 million was 37 respondents ( 11%), followed by the turnover of 10-50 million (49 %) or 164 respondents, and the last was the turnover of <10 million there were 98 respondents ( 29 %).The following is a more precise explanation in Figure 4.

Descriptive Analysis
Respondents were asked on their daily quality management practice based the Deming's system of profound knowledge.Table 2 presents the results of the analysis using descriptive statistics.Based on Table 2.It shows that from 335 respondents the lowest average value in filling out the questionnaire is 1 and the maximum average value is 10.Then the average value of each attribute is ranged from 6.66 on point number six, which is the attribute "institutionalizing training" to 8.06 on point number 2, namely the attribute "throw away fear."While the standard error value for each attribute is 0.13324, this shows that the level of understanding of small business managers is in the excellent category.Although pedagogically managers do not recognize Deming's big names and their philosophical theories very well, at the practical level, small managers have implemented the theory as a daily practice in developing quality business management.The result of the study can be depicted in figure 5.

Fig. 5. Deming's system of profound knowledge by SMEs
The average respondent's understanding of Deming theory is in the excellent category.The top three points are the second point, "Adopt the new philosophy of quality", the fifth point is "Improve constantly and forever the system of planning, production, and service, to improve quality and productivity and constantly decrease costs "and tenth point," Eliminate slogans, exhortations, and targets for the workforce ".While three points with the lowest score are: "Cease dependence on inspection to achieve quality.Instead of require statistical evidence that quality is bunt in.", " Institute modern methods of training on the job "and " Break down barriers between departments."

Conclusions
Overall, small business managers are practicing Deming's system of profound knowledge into their business operation.Managers adopt the new philosophy of quality to remain competitive in the market.Likewise, there is strong belief among the managers on the importance of continuous effort for improvement.They improve constantly and forever the system of planning, production, and service, to achieve high quality and productivity and continuously decrease costs.Small business managers also eliminate slogans, exhortations, and targets for the workforce.Managers of small business as a guideline when adopting quality management system can use the result of the study.The theory is easy to implement and have a good impact on organization performance.

Fig. 4 .
Fig. 4. Characteristics of respondents based on turnover per month

Table 1 .
The Deming Management Method Point 1Create constancy purpose or toward the improvement of product and service to be competitive and to stay in business, and to provide jobs.
relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.