Prior to Deming's ideas being adopted inspection was often used to select out the bad products. Companies would make products then sift through the resulting output removing those that were defective. If they could re-work them to be sold they would do so. Otherwise they would scrap the defective output.
Obviously this is a costly way to do business. It is much better to work on improving your processes so the output is all acceptable. Deming used to colorfully describe the old practice as "you burn the toast, I'll scrape."
Deming believed in improving the process, and doing so using process measures to guide improvement efforts.
In the New Economics, page 179, Deming states:
Obviously, option two is the preferred method. He also recognized that there are extreme situations where 100% inspection may be required (where safety may be jeopardized for example).
He also talked about inspection of incoming material from suppliers - see Chapter 15 of Out of the Crisis. Here he talks about using sampling to improve the process of accepting incoming material. The sampling options were improvements on 100% inspection of incoming material.
Deming also did a great deal of work with sampling to improve population estimates for the US Census Bureau and others as well as on surveys and the sampling involved in surveys. He wrote several books relating to sampling, Some Theory of Sampling, Sample Design in Business Research and On Errors in Surveys.
Dr. W. Edwards Deming management ideas have greatly influenced modern management practice. Many quotes and thoughts are attributed to W. Edwards Deming's system of management. Sometimes these represent his ideas accurately, and sometimes they do not. Here I attempt to clearly indicate what he actual said and include some of my thoughts on what he meant.