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Lean Your QFD — 'Lean' without customer satisfaction does not equal success

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At the University of Michigan College of Engineering where I used to teach QFD, I ran into my colleague, Jeff, in his office boxing up a brand new fax machine. Many of you know Jeff from his seminal work in Toyota's Production System and Lean Manufacturing.

image of a fax machine"What's going on, Jeff, can I help?" I offered. "Oh, I am returning this fax I bought yesterday." I noticed the logo of a Japanese company "M" on the box. "What's wrong with the fax?" "Well, the fax part works fine but I can't adjust the number of incoming rings for the voice answering machine like I could with my old fax."

"Really? You know, Jeff, Company M runs one of the most efficient, lean operations of any electronics company I've visited in Japan...," — and then, the ah-ha moment —"That's why I teach QFD."

Lean without customer satisfaction does not equal success.

Lean approaches have taken roots in many industries, improved efficiency of business operations, and become woven into Six Sigma methods, now renamed Lean Sigma. Yet there are cases like this fax machine where excellence in lean did not translate into sales of a finished product or service.

You hear about them on the news even though lean may not be mentioned: an auto factory with top efficiency awards has unsold finished vehicles piling up beyond the 120-day inventory level; a financial institution losing long-time customers to competitors when they abruptly discontinued a service that had originally attracted the customers and they have become accustomed to. The very goal of lean is to achieve zero or little waste, so this is ironic. We should include unsold finished goods and lost customers in our considerations when applying lean. This means that companies employing lean initiatives must also develop an equally lean product development process to assure a tight match between customer needs and company resources; and not just in manufacturing and production, but in distribution, sales, and other downstream activities where lean efforts rarely focus.

The quality approach to aligning customer needs with company resources is QFD. But the traditional / classical QFD that was developed in Japan in the 1960s and brought to the U.S. in the 1980s automotive world is mixed bag of "lean." It is true that one purpose of QFD is to focus development and manufacturing attention on the quality assurance items that are linked through the matrices back to important and unsatisfied customer needs. But as many readers know, the traditional approaches to QFD —House of Quality, 4-Phase Model, Matrix of Matrices— is anything but lean.

The #1 complaint we hear is that QFD is a great concept but "it takes too long!"  I've heard from engineers that they were barely half-way through the first house (matrix) when the product went to market. What a shame that their customers would not enjoy the fruits of all that QFD labor. And how do you explain the overtime to build those charts when they were abandoned half-way?

What you need is a "lean" approach to QFD, that is, Blitz QFD® approach. No more houses or matrices (unless you love them). The Blitz has more efficient tools like the Maximum Value Table to do the heavy lifting. It's so versatile, it can replace all the matrices with a single table. The trick is focus early, because without the safety net of the House of Quality (HOQ), if you focus on the wrong customer needs, you may miss the mark.

STEP 1.  Focus begins by custom tailoring the required subset of Blitz QFD® tools for your organization and products. This is critical because unnecessary tools waste time and destroy credibility with your colleagues. Missing tools throw your out of focus.

STEP 2.  Then, we usually have to focus on a small subset of customers to study. Selecting the proper subset depends on so many factors such as the purpose and scope of the project (are you trying to retain customers, attract new ones, grow margins, grow share, etc.?) where the customers are, what they are doing, etc. Then we have to focus our "voice of customer" gathering efforts to the area of the customer's life and work that is most important to him or her. That's where we can learn the most about unfulfilled needs - the spoken ones and the latent ones. This may mean interviews with your customer's engineers if you're an automotive supplier, but even in those cases, it might be worth the effort to visit your customer's customers as well. After all, your customer may not fully understand his customer - think what value you could add if you uncover latent needs that could make your customer's product a hit!
image of Lean Customer Process Model
One approach to this is to make a process map of the customer. Figure 1 shows an example from a case study on heath care insurance for small businesses. It shows an employee dissatisfied with the payment process with his doctor. What he thought would be covered under his company insurance policy was different than what was paid to the doctor and he had to make up the difference. This makes the doctor look bad, the employer look bad, and the patient mad.

STEP 3.  Since the employee is a salaried professional, the small business probably wants to retain him. It's expensive to find and hire professionals and to lose one over an insurance snafu is a nightmare. So now we are getting some idea of what matters most to the small business owner, our customer. This type of analysis is done with another Blitz QFD® tool called the Customer Voice Table. It takes the verbatim voice of the customer and translates it into true customer needs. Customer needs can then be prioritized by the customer. This is a critical part of the Blitz QFD® process - we want the customer to prioritize his needs because needs are his domain and product design is our domain. Yet often the voice of the customer comes to us as product features because that is how we market to him. This prioritization is critical to sharpening our Blitz QFD® focus and so we like the Analytic Hierarchy Process (AHP) for its customer friendliness and precision. To set up the AHP your need a hierarchy of the customer needs and this is best done by the customer himself, starting with an Affinity Diagram. We teach him the KJ(TM) method to do this.<

click to view Customer Needs Prioritization with AHP STEP 4.  Prioritizing with AHP is really quite easy on the customer. First, he doesn't have to look at a long list of needs and try to make up some value for them, as can happen with rating surveys. A more natural way is to compare two things at a time and express a preference using natural language. With an hierarchy, this process is shortened because we only ask the customer to compare needs on high importance branches of the hierarchy. In Blitz QFD® we are not concerned with how "unimportant" the trivial many needs are, but in quickly focusing on how "important" the critical few are. Table 2 gives part of the process.

click to view a Maximum Value Table exampleSTEP 5.  With our attention focused on the top 1-2 needs, we can use the Maximum Value Table to identify all the critical to quality (CTQ) elements in design. Table 3 shows this analysis.

STEP 6. Key designs can now be explored with the marketing and operations people to fine tune into the final product.

In summary, the company in this case study states:

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