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When Quality Is No Longer The Differentiator

"The industry used to talk about kaizen, or continuous improvement, but that's no longer enough to survive in today's environment," Jose Maria Alapont, CEO of Federal-Mogul, was quoted saying recently during the Supplier Panel discussion at the 30th Automotive News World Congress* [2006].

Most analysts agree that the Big Three have made a significant gain in quality and productivity in recent years. In J.D. Power's consumer satisfaction survey and Consumer Report ratings, their models rank highly today among all car manufacturers, unlike in the 1990s when they desolately monopolized the bottom rankings. Some of their plants regularly boast some of the highest productivity. Yet their overall market share can erode in favor of foreign car makers.

No doubt, many factors are involved: labor issues, increasing energy costs, healthcare and pension liabilities, overcapacity, new levels of global competition, miscalculation of strategy, etc. Among all, the most significant we thought is that this narrowed gap in vehicle quality has made the conventional product attributes obsolete: quality and productivity are no longer the differentiators, at least in this industry sector.

This was, in fact, one of pivotal points that Dr. Akao made when he used Kano's model of expected vs. attractive quality to explain the theory of QFD, although not every QFD person appreciates it. That is, quality is a moving target and it is often invisible; what was once attractive quality may become expected quality over time when all competitors offer the same level of performance. [G. H. Mazur 1997]

The latter is extremely important not only to your product development but also to the way you practice QFD. Many in the auto industry leaned a "kindergarten" approach to QFD in the 1980-90s because they were rushed by the tremendous pressure from Japanese competition. Later, other industries and countries followed this truncated form of practice without realizing its limited application. In particular, these early models were called the Four-phase QFD, A-1 matrix, or "House of Quality" matrix (HOQ). Now we see that what was once a competitive level of QFD practice back in 1990s is no longer effective, and is not producing the desired result as seen in the auto industry example.

"If you have the product, you can get the price for it," was asserted by another Congress speaker. He pointed out lackluster products and pricing issues are the major reason for today's domestic automakers' decline. "Domestic carmakers won't be able to stop the decline in market share until they build more compelling vehicles" for today's consumers.*

Modern QFD now has the powerful front end needed to fully analyze customer needs, both spoken and unspoken, and quickly deliver solutions to the customer's most pressing demands. Isn't it time to update and upgrade your QFD knowledge to Modern QFD in order to better prepare your organization for 21st century product and service development?

Read "How does QFD differ from other quality initiatives?"

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*Quote source: Automotive News, Jan. 23, 2006

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