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 processes machines, methods, costs Distribution Consumer Research Design and redesign

Organizational 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

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 ¹Maturity 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