ENGM 620: Quality Management

Session Five – Sept. 25, 2012

• Organizing for Quality, Part I– Voice of the Customer– Voice of the Market – Process and Procedures

Customer Focus

Perceived Quality = Actual Quality - Expected Quality

Perceived Quality drives consumer behavior.

Customer Driven Cycle

Customer needs & expectations (Expected Quality)

Identify customer needs

Translate into products (Design Quality)

Output(Actual Quality)

Customer Perceptions (Perceived Quality)

Recall: Customers

• Deming

• Juran– Vital few– Useful many

Production, assembly, inspection

Suppliers

A

B

C

Tests of processesmachines, methods, costs

Distribution

Consumer Research

Design and redesign

Organizational Pyramid

Inverted Pyramid

Inverted Pyramid

Customers

Customer Needs

• Noriaki Kano– Dissatisfiers

requirements that are expected– Satisfiers

requirements customers say they want– Exciters/Delighters

innovative features customers do not expect

Reactive Customer-Driven Quality

Area of Complacency

Region of Dissatisfaction

Customer Expectations

Supplier Performance

Customer Information

• How does a company gather information on customer needs and expectations?

Customer Information - Active

• Customer surveys• Focus Groups

– panel of individuals who answer questions on company products & services

– advantage of direct voice of customer to organization.

• Direct customer contact– Black & Decker Execs. go to homeowner workshops– Harley Execs. go to rallies– Xerox Execs. spend one day each month answering customer

service phones– School Board, BOR, Admin. teach

– SDSMT SSI

GAPS

Customer Perception

Relative Importance

Wasted Time

Relative Strength

Minor Concerns

Areas for Improvement

SDSMT SSI

SDSMT SSI

Cautions/Concerns

Customer Information - Passive

• Comment cards• Field intelligence

– observation of customer behavior– Web site searches and inquiries

• Study complaints– Consider complaints as a source of good information– HP assigns every customer complaint to an owner– Caterpillar Execs receiving complaint must follow up

Customer Relationship Management

• Complaint Resolution• Feedback• Corrective Action• Guarantees

Listening is the first step and the last step.

- Cantus Fraggle

Leading Practices

• Both near and long term customer needs and expectations

• Systematic processes for gathering and managing customer needs and information

• Linkages between the voice of the customer and design, production, and delivery processes.

• Promote customer trust and confidence• Customer relationship management processes• Measure customer satisfaction and use the information

Voice of the Market

• What is the current state of – Our industry? – Our competitors? – The world class organizations with similar

goals?

Benchmarking

• What it is– Measuring company processes by those of the best

competitors• in your industry• outside your industry• domestic and foreign

– Learning how others do process– Adapting what you learn to your own company– Taking action to meet or exceed the best– Becoming the new industry leader

Benchmarking

• What it is not– a mechanism for resource reductions

its aim is not “downsizing”– performance evaluation of individuals and

groups within company– something you do half-heartedly– program, panacea, fad, or public relations

campaign

Benchmarking • Benefits

– assures customer requirements are met– establishes effective goals and productivity measures– encourages striving for excellence, breakthrough thinking

and innovation– emphasizes sensitivity to changing customer needs– creates better understanding of competitors and the

dynamics of the industry– provides a sense of urgency for business process

improvement– ensures best industry practices are included in work

processes

Benchmarking

• Concerns– Reciprocity and cooperation– Not everyone who is willing is helpful– You have to understand your own processes

first– Benchmarking takes time and money

Steps for Benchmarking

Prepare to Benchmark– Understand your company– Document and communicate– Get management support– Assemble the team– Devote the time

Prepare

Copyright 1992 Juran Institute, Inc.

Steps for Benchmarking

Fact Finding– What will be benchmarked– Who should we

benchmark– Decide how data is to be

collected– Collect the information– Analyze the results Prepare

Facts

Benchmarking

Develop Action Plans– Communicate results– Define action plans– Implement change

Prepare

Facts

Action

Benchmarking

Maturity and Recalibration– Monitor progress– Update benchmarks– Report progress to

employees

Prepare

Facts

Action

Maturity

Types of Benchmarking

• Process

• Financial

• Performance

• Product

• Strategic

• Functional

Quality Function Deployment

• Link customer demands to product and process characteristics (technical)

• Meet customer demands through both the product design process and the design of the production systems which produce the product

• For service industries: Meet customer demands through the choice of service to offer and design process of the procedure to complete the service

Following Class

• Homework– Ch. 5 Disc. Questions: 1, 2, 6, 7, 10– Ch. 6 Disc. Questions: 1, 8, 9

• Topic– Organizing for Quality, Part II

• Preparation– Chapters 8 and 9

• Video note