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How To Survive Economic Downturn with Modern QFD

"I need for all of you to fight for the future. I need all of you to be open to creative ways of doing business. None of us can afford to watch the American auto industry fail." [Barack Obama, 2006, addressing the UAW convention; Source: The New York Times, November 30, 2008]

The then Illinois Senator was not alone in sensing trouble ahead. The Detroit Three automakers (GM, Ford, Chrysler) had already been restructuring globally and working on technologies that would make their cars run cleaner, more efficient, and petroleum independent. The changes did not materialize fast enough, though. Pressures, some beyond their control, others caused by misjudgments, all came at once in this worst economy in decades, possibly threatening their very existence.

Consider this a wake-up call for any management team, regardless of your industry. Remember and never forget Deming's fifth point for management: "Improve constantly and forever every process for planning, production and service."

While the mechanisms of the Detroit Three's problems are far more complex than we can sort out in this short newsletter, as far as QFD is concerned, what solutions can we provide to these oldest and most experienced users in the QFD community?

It was GM, Ford, and Chrysler who initiated studying and incorporating Japanese quality practices in 1970s and 1980s, and willingly shared this knowledge with the rest of U.S. industry and indeed much of the world. It was they who organized the world's first QFD symposium in 1989, presenting and publishing the first QFD application cases outside Japan and integrating other methodologies such as Pugh Concept Selection, Taguchi Methods, TRIZ, etc. into a far more innovative new product development strategy exceeding even the Japanese examples.

Unfortunately, perhaps partly due to the success of being early adopters, the Detroit Three somehow allowed their QFD practice to freeze into the House of Quality / 4-Phase QFD model, and did not keep up with current best practices even as the market changed and foreign competitors (German and Korean makers, for example) caught up.

As this traditional QFD approaches became incorporated into six sigma and DFSS, many of the first tier automotive component suppliers began training their engineers in the Modern Blitz QFD® taught in the QFD Green Belt® and QFD Black Belt® courses, when they realized the weakness of this "traditional" 4-Phase model.

What weaknesses?

So, how can Modern QFD help businesses survive this economic downturn? How it help reduce costs and still satisfy the customers?

  1. Prioritize basic functions with AHP
  2. Assure cost cutting doesn't kill your product
  3. Attract customers with quality - New Kano Model
  4. Address emotional needs with Kansei and Lifestyle Deployment
  5. Improve human resource management and cut project time and resources
  6. Educate management on Modern QFD - QFD Gold Belt®

Let us elaborate further:

1. Prioritize basic features with AHP. In tight economic times, customers may sacrifice lower priority needs for high quality and performance of high priority needs. When there are many needs, a simple rating system (1-5 or 1-10) may not accurately separate high priorities from the middle and lower. The Analytic Hierarchy Process (AHP) does this with high precision in a customer-friendly and usually faster way. In fact, AHP is so critical to QFD that in 2007, Dr. Thomas Saaty its creator received the international Akao Prize®.

A key requirement of AHP is that respondents have domain knowledge of the data. Thus, asking customers to prioritize their needs makes more sense than asking them prioritize product features. Blitz QFD® in Modern QFD tool set uses the Customer Voice table to translate features into customer needs to assure this is accurate and complete. Both tools are taught in the QFD Green Belt® and QFD Black Belt® programs. Professional software packages such as Expert Choice® and Decision Lens® also offer web-based interfaces to facilitate both data gathering and analysis.

2. Assure cost cutting doesn't kill your product. An intuitive response to cost pressures is to reduce the cost of the most expensive components of the product or service. It is not unusual, however, for costly components to deliver much of the value customers are buying. Cost Deployment can help developers determine the value customers place on subsystems and components to help assure that cost reduction efforts do not kill the product's value. This cost-driven QFD approach can focus you on over- engineered and over-priced features.

3. Attract customers with quality. The Kano Model is a framework developed by Dr. Noriaki Kano for "attractive quality creation" that helps explain why removing defects does not equal customer satisfaction. Almost every QFD presenter talks about the Kano model, but in order to successfully integrate this concept in your New Product Development, you must understand several key issues. New Kano Model, developed by the QFD Institute research, holds the key. New Kano Model is taught in the workshop and also a part of the QFD Black Belt® course.

4. Address emotional needs with Kansei Engineering and Lifestyle Deployment. As sophisticated Brand marketers know, the more senses you employ, the broader the impact on customers' experience and loyalty. Kansei is a powerful method to bridge marketing with industrial design and engineering. It integrates primary market research, psychological assessment tools, and statistical analysis to draw boundaries that can reduce costly, time-consuming iterative designs. Kansei Engineering is taught both as a stand-alone course and in the QFD Black Belt® program.

5. Improve human resource management and complete projects sooner with Speed Deployment. Is it possible to complete more projects sooner without adding resources or reducing product quality and performance? Modern QFD's Blitz QFD® offers NPD tools that shorten project duration without adding cost or sacrificing value.

6. Modern QFD for management. Top management's responsibility to support employee innovation is to communicate how important new product development is to the business strategy. A training budget is crucial to achieving the goals of projects related to this strategy. The QFD Institute offers the QFD Gold Belt® course for executives and senior technical managers who, though they may not need to know the details of QFD, are in a position to support innovation and quality initiatives and approve the training budget.

Hoshin Policy Management is another tool for establishing corporate vision and strategy and ascertaining these goals link to short-term strategies as well as downstream activities throughout various functions. Some Six Sigma practitioners mix Hoshin with QFD because of tools the two methodologies share. But Hoshin is actually for executives making top-down long-term strategic decisions. Hoshin Workshop is a 2-day in-company seminar followed by optional facilitation, and can be arranged by contacting the QFD Institute.

In conclusion, in order to use the benefits of QFD (or any other method) fully, a single point-in-time effort risks being squandered without an ongoing commitment to staying current with best practices. The QFD Institute exists to continuously create new methods, research related technologies, and integrate them into a system of assuring new product development quality and customer satisfaction. In these tough economic times, consider joining us in the public courses (the links below)..

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