Study on Quality Function Deployment

Table of Contents

Contents SECTION I UNDERSTANDING QUALITY FUNCTION DEPLOYMENT 1.1 QFD 1.2 Introduction to QFD 1.3 Affinity diagrams 1.4 Hierarchy trees 1.5 Matrices and tables 1.6 Relations diagrams 1.7 The House of Quality 1.8 Models for Applying QFD Tools SECTION II PERFORMING QFD STEP BY STEP 2.1 Gather Customer Needs 2.2 Product Planning 2.3 Concept Development 2.4 Subsystem/Subassembly/Part Deployment Matrix SECTION III QFD is not only for Manufacturing : Example of Bank using QFD 3.1 Introduction 3.2 Enter Quality Function Deployment 3.3 Acting on the Research Results 3.4 House of Quality 1 3.5 House of Quality 2 3.6 House of Quality 3 3.7 Results Beyond Expectations 3.8 Conclusion: QFD Not Just for Manufacturing SECTION IV EXAMPLES OF COMPANIES APPLYING QFD 4.1 Service QFD Applications 4.2 Product QFD Applications 4.3 Healthcare and Medical Device QFD Applications 4.4 Entertainment and Theme Park QFD Applications Bibliography

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Page No 2 2 5 6 7 8 8 10 12 14 17 18 21 21 23 23 25 25 26 26 27 27 28 29 30

SECTION I UNDERSTANDING QUALITY FUNCTION DEPLOYMENT

1.1 QFD Quality Function Deployment (QFD) is a set of powerful product development tools that were developed in Japan to transfer the concepts of quality control from the manufacturing process into the new product development process.

The main features of QFD are a focus on meeting market needs by using actual customer statements (referred to as the "Voice of the Customer"), its effective application of mutlidisciplinary teamwork and the use of a comprehensive matrix (called the "House of Quality") for documenting information, perceptions and decisions. Some of the benefits of adopting QFD have been documented as : •

Reduced time to market

•

Reduction in design changes

•

Decreased design and manufacturing costs

•

Improved quality

•

Increased customer satisfaction

1.2 Introduction to QFD Yoji Akao is widely regarded as the father of QFD and his work led to its first implementation at the Mitsubishi Heavy Industries Kobe Shipyard in 1972. The interest in QFD in the West was stimulated by reports of the achievements made

by Toyota through its application between 1977 and 1984. These included a reduction in product development costs by 61%, a decrease in the development cycle by one third and the virtual elimination of rust related warranty problems Yoji Akao defined QFD as "a method for developing a design quality aimed at 3

satisfying the consumer and then translating the consumer's demands into design targets and major quality assurance points to be used throughout the production phase".

The main features of QFD are its focus on meeting customer needs through the use of their actual statements (termed the "Voice of the Customer"), its facilitation of multidisciplinary team work and the use of a comprehensive matrix for documenting information, perceptions and decisions. This matrix is commonly referred to as the "House of Quality" and is often perceived to represent QFD in its entirety.

In addition to the "House of Quality" matrix, QFD utilises "Seven Management and Planning Tools"which are used in many of its procedures: 1. Affinity diagrams.

2. Relations diagrams.

3. Hierarchy trees.

4. Matrices and tables.

5. Process Decision Program Diagrams (PDPC) 6. The Analytic Hierarchy Process (AHP) 7. Blueprinting

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Figure 1.

House of Quality

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1.3 Affinity diagrams This is a powerful method used by a team to organise and gain insight into a set of qualitative information, such as voiced customer requirements. Building an Affinity Diagram involves the recording of each statement onto separate cards which are then sorted into groups with a perceived association. A title card which summarises the data within each group is selected from its members or is created where necessary. A hierarchy of association can be achieved by then sorting these title cards into higher level groups.

Figure 2.

Affinity Diagram

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1.4 Hierarchy trees A

Hierarchy

tree

or

Tree

Diagram

also

illustrates

the

structure

of

interrelationships between groups of statements, but is built from the top down in an analytical manner. It is usually applied to an existing set of structured information such as that produced by building an Affinity Diagram and is used to account for flaws or incompleteness in the source data. Working down from the top a team can amendments at each level and the completed hierarchy can be drawn as shown below.

Figure 3.

Tree Diagram

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1.5 Matrices and tables The matrix is a tool which lies at the heart of many QFD methods. By comparing two lists of items using a rectangular grid of cells, it can be used to document a team's perceptions of the interrelationships that exist, in a manner which can be later interpreted by considering the entries in particular cells, rows or columns. In a prioritisation matrix the relative importance of items in a list and the strength of interrelationships are given numerical weightings (shown as numbers or symbols). The overall priority of the items of one list according to their relationships with another list, can then be calculated as shown below.

Figure 4

Matrices

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1.6 Relations diagrams Relations diagrams or Interrelationship Di-graphs can be used to discover priorities, root causes of problems and unstated customer requirements.

Process Decision Program Diagrams (PDPC) PDPC are used to study potential failures of new processes and services.

The Analytic Hierarchy Process (AHP) AHP uses pairwise comparisons on hierarchically organised elements to produce an accurate set of priorities.

Blueprinting Blueprinting is a tool used to illustrate and analyse all the processes involved in providing a service.

1.7 The House of Quality The "House of Quality" matrix is the most recognised form of QFD .It is utilised by a multidisciplinary team to translate a set of customer requirements, drawing upon market research and benchmarking data, into an appropriate number of prioritised engineering targets to be met by a new product design. There are many slightly different forms of this matrix and this ability to be adapted to the requirements of a particular problem or group of users forms one of its major strengths. The general format of the "House of Quality" is made up of six major components which are completed in the course of a QFD project: 1. Customer requirements (HOWs) - a structured list of requirements derived from customer statements.

2. Technical requirements (WHATs) - a structured set of relevant and measurable product characteristics.

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3. Planning matrix - illustrates customer perceptions observed in market surveys. Includes relative importance of customer requirements, company and competitor performance in meeting these requirements.

4. Interrelationship matrix - illustrates the QFD team's perceptions of interrelationships between technical and customer requirements. An appropriate scale is applied, illustrated using symbols or figures. Filling this portion of the matrix involves discussions and consensus building within the team and can be time consuming. Concentrating on key relationships and minimising the numbers of requirements are useful techniques to reduce the demands on resources.

5. Technical correlation (Roof) matrix - used to identify where technical requirements support or impede each other in the product design. Can highlight innovation opportunities.

6. Technical priorities, benchmarks and targets - used to record the priorities assigned to technical requirements by the matrix, measures of technical performance achieved by competitive products and the degree of difficulty involved in developing each requirement. The final output of the matrix is a set of target values for each technical requirement to be set by the new design, which are linked back to the demands of the customer.

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Figure 5

House of Quality

1.8 Models for Applying QFD Tools The "House of Quality" can be used as a stand-alone tool to generate answers to a particular development problem. Alternatively it can be applied within a more complex system in which a series of tools are used. The "Clausing Four-Phase Model" is the most widely known and utilised of these approaches. It translates customer requirements through several stages into production equipment settings; using three coupled QFD matrices and a table for planning production requirements.

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Figure 6

Stages

The less known and more comprehensive "Matrix of Matrices" model provides developers with thirty matrix tools and tables which consider development steps not included in the "Four-Phase" approach (see below). This represents the full QFD tool kit and practitioners should select and adapt from this set as appropriate

rather

than

attempt

to

implement

it

in

its

entirety.

Such is the flexibility of the matrix tools utilised by QFD, its methods have now been applied in many fields other than product development. One of the main areas is in strategy formulation and implementation.

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Section II Performing QFD step by Step

QFD uses a series of matrices to document information collected and developed and represent the team's plan for a product. The QFD methodology is based on a systems engineering approach consisting of the following general steps: 1. Derive top-level product requirements or technical characteristics from customer needs (Product Planning Matrix).

2. Develop product concepts to satisfy these requirements.

3. Evaluate product concepts to select most optimum (Concept Selection Matrix).

4. Partition system concept or architecture into subsystems or assemblies and flow-down higher- level requirements or technical characteristics to these subsystems or assemblies.

5. Derive lower-level product requirements (assembly or part characteristics) and specifications from subsystem/assembly requirements (Assembly/Part Deployment Matrix).

6. For

critical

assemblies

or

parts,

flow-down

lower-level

product

requirements (assembly or part characteristics) to process planning.

7. Determine manufacturing process steps to meet these assembly or part characteristics.

8. Based in these process steps, determine set-up requirements, process controls and quality controls to assure achievement of these critical assembly or part characteristics.

The matrices and the specific steps in the QFD process are as follows.

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2.1 Gather Customer Needs 1. Plan collection of customer needs. What sources of information will be used? Consider customer requirement documents, requests for proposals, requests for quotations, contracts, customer specification documents, customer meetings/interviews, focus groups/clinics, user groups, surveys, observation, suggestions, and feedback from the field. Consider both current customers as well as potential customers. Pay particular attention to lead customers as they are a better indicator of future needs. Plan who will perform the data collection activities and when these activities can take place. Schedule activities such as meetings, focus groups, surveys, etc.

2. Prepare for collection of customer needs. Identify required information.

Prepare agendas, list of questions, survey forms, focus group/user meeting presentations.

3. Determine customer needs or requirements using the mechanisms described in step 1. Document these needs. Consider recording any meetings. During customer meetings or focus groups, ask "why" to understand needs and determine root needs. Consider spoken needs and unspoken needs. Extract statements of needs from documents.

Summarize surveys and other data. Use techniques such as ranking, rating, paired comparisons, or conjoint analysis to determine importance of customer needs. Gather customer needs from other sources such as customer requirement documents, requests for proposals, requests for quotations, contracts, customer specification documents, customer meetings/interviews, focus groups, product clinics, surveys, observation, suggestions, and feedback from the field.

4. Use affinity diagrams to organize customer needs. Consolidate similar needs and restate. Organize needs into categories. Breakdown general customer needs into more specific needs by probing what is needed.

Maintain dictionary of original meanings to avoid misinterpretation. Use function analysis to identify key unspoken, but expected needs.

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5. Once needs are summarized, consider whether to get further customer feedback on priorities. Undertake meetings, surveys, focus groups, etc. to get customer priorities. State customer priorities using a 1 to 5 rating. Use ranking techniques and paired comparisons to develop priorities.

2.2 Product Planning 1. Organize customer needs in the Product Planning Matrix. Group under logical categories as determined with affinity diagramming.

2. Establish critical internal customer needs or management control requirements; industry, national or international standards; and regulatory requirements. If standards or regulatory requirements are commonly understood, they should not be included in order to minimize the information that needs to be addressed.

3. State customer priorities. Use a 1 to 5 rating. Critical internal customer needs or management control requirements; industry, national or international standards; and regulatory requirements, if important enough to include, are normally given a rating of "3".

4. Develop competitive evaluation of current company products and competitive products. Use surveys,

customer meetings or focus

groups/clinics to obtain feedback. Rate the company's and the competitor's products on a 1 to 5 scale with "5" indicating that the product fully satisfies the customer's needs. Include competitor's customer input to get a balanced perspective.

5. Review the competitive evaluation strengths and weaknesses relative to the customer priorities. Determine the improvement goals and the general strategy for responding to each customer need. The Improvement Factor is "1" if there are no planned improvements to the competitive evaluation level. Add a factor of .1 for every planned step of improvement in the competitive rating, (e.g., a planned improvement of goiung from a rating of "2" to "4" would result in an improvement factor of "1.2". Identify warranty, 15

service, or reliability problems & customer complaints to help identify areas of improvement.

6. Identify the sales points that Marketing will emphasize in its message about the product. There should be no more than three major or primary sales points or two major sales points and two minor or secondary sales points in order to keep the Marketing message focused. Major sales points are assigned a weighting factor of 1.3 and minor sales points are assigned a weighting factor of 1.1.

7. The process of setting improvement goals and sales points implicitly develops a product strategy. Formally describe that strategy in a narrative form. What is to be emphasized with the new product? What are its competitive strengths? What will distinguish it in the marketplace? How will it be positioned relative to other products? In other words, describe the value proposition behind this product. The key is to focus development resources on those areas that will provide the greatest value to the customer. This strategy brief is typically one page and is used to gain initial focus within the team as well as communicate and gain concurrence from management.

8. Establish product requirements or technical characteristics to respond to customer needs and organize into logical categories. Categories may be related to functional aspects of the products or may be grouped by the likely subsystems to primarily address that characteristic. Characteristics should be meaningful (actionable by Engineering), measurable, practical (can be determined without extensive data collection or testing) and global. By being global, characteristics should be stated in a way to avoid implying a particular technical solution so as not to constrain designers.

This will allow a wide range of alternatives to be considered in an effort to better meet customer needs. Identify the direction of the objective for each characteristic (target value or range, maximize or minimize).

9. Develop relationships between customer needs and product requirements or technical characteristics. These relationships define the degree to which as product requirement or technical characteristic satisfies the 16

customer need. It does NOT show a potential negative impact on meeting a customer need - this will be addressed later in the interaction matrix.

Consider the goal associated with the characteristic in determining whether the characteristic satisfies the customer need. Use weights (we recommend using 5-3-1 weighting factors) to indicate the strength of the relationship - strong, medium and weak. Be sparing with the strong relationships to discriminate the really strong relationships.

10. Perform a technical evaluation of current products and competitive products. Sources of information include: competitor websites, industry publications, customer interviews, published specifications, catalogs and brochures, trade shows, purchasing and benchmarking competitor’s products, patent information, articles and technical papers, published benchmarks, third-party service & support organizations, and former employees. Perform this evaluation based on the defined product requirements or technical characteristics. Obtain other relevant data such as warranty or service repair occurrences and costs.

11. Develop preliminary target values for product requirements or technical characteristics. Consider data gathered during the technical evaluation in setting target values. Do not get too aggressive with target values in areas that are not determined to be the primary area of focus with this development effort.

12. Determine potential positive and negative interactions between product requirements or technical characteristics using symbols for strong or medium, positive or negative relationships. Too many positive interactions suggest potential redundancy in product requirements or technical characteristics. Focus on negative interactions - consider product concepts or technology to overcome these potential trade-offs or consider the trade-off's in establishing target values.

13. Calculate importance ratings. Multiply the customer priority rating by the improvement factor, the sales point factor and the weighting factor associated with the relationship in each box of the matrix and add the resulting products in each column.

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14. Identify a difficulty rating (1 to 5 point scale, five being very difficult and risky) for each product requirement or technical characteristic. Consider technology

maturity,

personnel

availability,

technical

risk,

technical

manufacturing

qualifications, capability,

resource

supply

chain

capability, and schedule. Develop a composite rating or breakdown into individual assessments by category.

15. Analyze the matrix and finalize the product plan. Determine required actions and areas of focus.

16. Finalize target values. Consider the product strategy objectives, importance of the various technical characteristics, the trade-offs that need to be made based on the interaction matrix, the technical difficulty ratings, and technology solutions and maturity.

17. Maintain the matrix as customer needs or conditions change.

2.3 Concept Development 1. Develop concept alternatives for the product. Consider not only the current approach and technology, but other alternative concept approaches and technology. Use brainstorming. Conduct literature, technology, and patent searches. Use product benchmarking to identify different product concepts. Develop derivative ideas. Perform sufficient definition and development of each concept to evalaute against the decision criteria determined in the next step.

2. Evaluate the concept alternatives using the Concept Selection Matrix. List product requirements or technical characteristics from the Product Planning Matrix down the left side of the Concept Selection Matrix. Also add other requirements or decision criteria such as key unstated but expected

customer

needs

or

requirements,

manufacturability

requirements, environmental requirements, standards and regulatory requirements,

maintainability

/

serviceability

requirements,

support

requirements, testability requirements, test schedule and resources, technical risk, business risk, supply chain capability, development resources, development budget, and development schedule.

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3. Carry forward the target values for the product requirements or technical characteristics from the Product Planning Matrix. Add target values as appropriate for the other evaluation criteria added in the previous step.

Also bring forward the importance ratings and difficulty ratings associated with each product requirement or technical characteristic from the Product Planning Matrix. Normalize the importance rating by dividing the largest value by a factor that will yield "5" and post this value to the "Priority" column. Review these priorities and consider any changes appropriate since these are the weighting factors for the decision criteria. Determine the priorities for the additional evaluation criteria added in the prior step.

List concepts across the top of the matrix.

4. Perform engineering analysis and trade studies. Rate each concept alternative against the criteria using a "1" to "5" scale with "5" being the highest rating for satisfying the criteria.

5. For each rating, multiply the rating by the "Priority" value in that row.

Summarize these values in each column in the bottom row. The preferred concept alternative(s) will be the one(s) with the highest total.

6. For the preferred concept alternative(s), work to improve the concept by synthesizing a new concept that overcomes its weaknesses. Focus attention on the criteria with the lowest ratings for that concept ("1's" and "2's"). What changes can be made to the design or formulation of the preferred concept(s) to improve these low ratings with the product concept? Compare the preferred concept(s) to the other concepts that have higher ratings for that particular requirement. Are there ways to modify the preferred concept to incorporate the advantage of another concept?

2.4 Subsystem/Subassembly/Part Deployment Matrix 1. Using the selected concept as a basis, develop a design layout, block diagram and/or a preliminary parts list. Determine critical subsystems, subassemblies or parts. Consider impact of subsystems, subassemblies or parts on product performance or with respect to development goals.

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What parts, assemblies or subsystems present major challenges or are critical to the success and operation of the product? What critical characteristics have a major effect on performance? Consider performing failure mode and effects analysis (FMEA); failure mode, effects and criticality analysis (FMECA); or fault tree analysis (FTA) to help pinpoint critical items and their critical characteristics from a reliability/quality perspective.

2. If there will be multiple Subsystem/Subassembly/Part Deployment Matrices prepared, deploy the technical characteristics and their target values to the appropriate matrices. Carry forward the important or critical product requirements or technical characteristics from Product Planning Matrix (based on importance ratings and team decision) to the Subsystem/Subassembly/Part Deployment Matrix. These "product needs" become the "what's" for this next level matrix. Where appropriate, allocate target values (e.g., target manufacturing cost, mean-time between failures, etc.) to the Subsystem / Subassembly / Part Deployment Matrices.

Organize these product requirements or technical characteristics by assembly(ies) or part(s) to be addressed on a particular deployment matrix. Include any additional customer needs or requirements to address more detailed customer needs or general requirements. Normalize the Importance Ratings from the Product Planning Matrix and bring them forward as the Priority ratings. Review these priority ratings and make appropriate changes for the subsystems, subassemblies or parts being addressed. Determine the the Priority for any needs that were added.

3. Considering product requirements or technical characteristics, identify the critical part, subassembly or subsystem characteristics. State the characteristics in a measurable way. For higher-level subsystems or subassembles, state the characteristics in a global manner to avoid constraining concept selection at this next level.

4. Develop relationships between product needs (product-level technical characteristics) and the subsystem / subassembly / part technical

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characteristics. Use 5-3-1 relationship weights for strong, medium and weak relationships. Be sparing with the strong relationships.

5. Develop preliminary target values for subsystem / subassembly / part characteristics.

6. Determine potential positive and negative interactions between the technical part characteristics using symbols for strong or medium, positive or negative relationships. Too many positive interactions suggest potential redundancy in critical part characteristics. Focus on negative interactions consider different subsystem / subassembly / part concepts, different technologies,

tooling

concepts,

material

technology,

and

process

technology to overcome the potential trade-off or consider the trade-off in establishing target values.

7. Calculate

importance

ratings.

Assign

a

weighting

factor

to

the

relationships (5-3-1). Multiply the customer importance rating by the improvement factor (if any), the sales point factor (if any) and the relationship factor in each cell of the relationship matrix and add the resulting products in each column.

8. Identify a difficulty rating (1 to 5 point scale, five being very difficult and risky) for each subsystem / subassembly / part requirement or technical characteristic.

Consider

technology

maturity,

personnel

technical

qualifications, business risk, manufacturing capability, supplier capability, and schedule. Develop a composite rating or breakdown into individual assessments by category. Determine if overall risk is acceptable and if individual risks based on target or specification values are acceptable.

Adjust target or specification values accordingly.

9. Analyze

the

matrix

and

finalize

the

subsystem/subassembly/part

deployment matrix. Determine required actions and areas of focus.

10. Finalize target values. Consider interactions, importance ratings and difficulty ratings.

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SECTION III QFD is not only for Manufacturing : Example of Bank using QFD 3.1 Introduction In the late 1990s, the Bank of the Southwest (BSW), a regional financial institution located in the southwestern United States, decided it was not getting its fair share of the equity loan business. Residential housing prices were climbing at a steady rate in virtually all of its markets, and credit card debt also was rising. Many customers were converting credit card debt into lower-interestrate home equity loans, but research showed that fewer than 25 percent of BSW customers who converted were doing so through the bank's equity loan facility.

BSW was getting only 2 percent of the conversions to equity loans in the market, even though it had a banking market share in its largest markets of between 11 and 23 percent.

The CEO set the goal of doubling both the rate of credit-card-to-equity-loan conversions for current customers (from 25 to 50 percent) and the percent of overall equity loans it was capturing (from 2 to 4 percent). He wanted that accomplished in 12 months. When these goals were announced, they were considered aggressive, in fact, the bank personnel in charge of promotion considered them unattainable.

3.2 Enter Quality Function Deployment A consultant suggested the bank use quality function deployment (QFD), a powerful method for translating customer needs into design requirements.

Though historically applied to product design work, QFD can work just as well for designing services and processes.

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BSW decided to try this route, and set an objective that the bank's promotions group use QFD to design a home equity package that would capture a greater share of the market. The promotions group started its work by gathering reliable data on customer needs. These include stating clear objectives, determining what elements of the market are in scope for the design effort, segmenting the customers based on functional needs, then creating a plan to gather voice of the customer data from the segments of potential customers most likely to affect the objectives.

3.3 Acting on the Research Results An analysis of the current process for producing equity loans showed that the average loan was taking more than 24 days, compared to the expectation of five days or less. In addition, there was tremendous variability from loan to loan. The quickest were done in 15 days, but many took more than twice as long. What was the reaction to these facts? Management felt that it was unrealistic to expect incremental improvement efforts to reduce the processing time from 24 days to five. So they turned once again to their consultant, who suggested the bank change the focus of its QFD effort. Rather than aim at getting the right loan package, he said, they should use QFD to design a new, much faster process.

That plan was endorsed, and the promotions group was instructed to redesign the process, including a redesign of the team itself. The membership changed to include people from all parts of the current process so that all of the bank internal customers as well as regulatory and legal customers were represented.

This change in focus turned out to be the key to getting an effective process designed, piloted and implemented in less than 22 weeks.

Some necessary changes to the process became obvious early on. In working with several representative equity loan customers (from two different customer segments), the team found that customers did not want to have to make several trips to the bank as the existing process required. Actually, the physical presence 23

of the customer at the bank was really needed only once per loan – when it was time to sign the legal documents. All other exchanges could be done by phone and/or email. Under some circumstances, the signing also could be arranged to be done at a place of the customer's choosing rather than at the bank. Other changes to the process came about through the detailed QFD analysis.

3.3 Executing the Steps of QFD Quality function deployment asks project teams to work through a series of steps to translate what customers need into specific design requirements.

It starts by having the team determine priority themes in the voice of the customer statements. Usually this is done by sorting customer statements using an affinity diagram, then summarizing the discovered needs in a tree diagram.

The BSW team had to balance external customer requirements against those of, for example, the legal department and regulatory agencies. Internal banking policies also had to be satisfied.

The rest of the QFD analysis is based around a series of specialized matrices (each a house of quality) that help the team link the needs first to specific performance requirements and then to operational factors in the process that will guarantee those requirements are met (Figure 1).

Figure 7: Linking Needs to Performance Requirements to the Process

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3.4 House of Quality 1 Customers ask for things to be easy, fast, intuitive, etc. Unfortunately those words are not definitive enough for a designer to act upon them. The first house of quality translates the wants and needs of the various customers into technical critical customer requirements (CCRs). In addition, the first house of quality: •

Captures how well competitors are able to accomplish these same wants

•

Does a pair-wise comparison of CCRs to see if they are in conflict or not

•

Provides a technical comparison of various ways of putting the CCRs into practice

Most Important Customer Needs – The research allowed the team to identify the most important customer needs and assign each a priority number (1 to 10, with 10 being the most important). The top four needs and their priority scores were: 1. Fast (priority = 9) 2. Require very little of their time (priority = 8) 3. Give them a maximum loan amount (priority = 5) 4. At a competitive interest rate (priority = 7) The team established the following CCRs to answer the wants: 1. "Fast" was defined as cycle time of five business days +/- one day.

2. "Require little time" was defined as initial contact time of 60 minutes and total follow-up contact time of 90 minutes.

3. "Maximum loan amount" was determined by an algorithm based on appraised value, value trends in last five years and type of building (risk related to collateral).

4. "Competitive interest rate" depended on the region and the person's payment history (risk related to person).

In many design projects, it is advantageous to do further analysis on any new, unique or especially difficult CCRs to determine what factors in the process can influence those CCRs. This analysis happens through the second house of quality.

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In this case, the bank had never monitored or tried to control contact with the external customer (a key input), so the two "contact time" requirements were transitioned to the second house of quality. The bank decided to include the "fast" requirement in this analysis as well. Though the bank had historically monitored cycle time, there had been no attempt at control.

3.5 House of Quality 2 While there is not enough room here to go through every analysis that went into the House of Quality 2, here is one example: To make sure the company could meet the CCR for initial contact time (less than 60 minutes), the team worked on designing a structured-yet-flexible interface process that provided for all modes of initial contact – phone, in-person and email. A phone answering script rapidly took the person's query through initial qualifying filters and provided for getting application forms to the customer via mail, email or fax. All of the forms were in the same format, no matter what their point of origination, so all bank clerks had the skills to process them. That provided tremendous flexibility in allocation of data entry activities. And, in the case of internet-based contacts, the customer did the data entry. However, real-time filters were designed to flag the most frequent mistakes and thus reduce the need for corrections later.

3.6 House of Quality 3 There was one further translation step in process design. A third house of quality was created to address how the important process factors would be monitored and controlled. The team identified relevant data and set up mechanisms so that it was collected and charted daily – often in real-time but in no case longer than 24 hours after the event. Anomalies were recorded so that decision rules could be updated as more data/information became available. In other words, a "learning" system was implemented as an integral part of the measure/control system.

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The beauty of these interlinking houses of quality is that the project team can explain exactly why each process element and control mechanism is in place – because the team can link it directly back to customer statements or regulatory requirements.

3.7 Results Beyond Expectations Bank of the Southwest decided to pilot the newly designed process in a major metropolitan market for six months, and then evaluate it for an enterprise-wide deployment. But the results after three months were substantially better than anticipated (an increase of 30 percent for BSW customer-initiated equity loans), so the CEO directed the promotions group to suspend the pilot and begin implementation.

Just six months later, the response from current BSW customers averaged an increase of 80 percent (the smallest gain was 62 percent and the largest was 131 percent) in the bank's seven largest markets. However, this response was not duplicated for non-BSW customers. Market share in the non-customer segment only grew from 2 to 2.6 percent.

Statistical analysis of the ongoing equity loan operations revealed an unexpected result – the shorter the time to complete the loan transaction, the better the loan payment record. Further study showed that applications from persons with very good credit went through the new process faster. So, the new process became a win-win, with the bank increasing its success in the home equity loan market and increasing the quality of the loan payment records.

3.8 Conclusion: QFD Not Just for Manufacturing Tools like QFD have such strong roots in manufacturing that many people in services either think these tools do not apply to their situation or think they are simply too complicated. Obviously, the kind of detailed analysis possible with QFD is just as effective in helping companies understand complex service processes.

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SECTION IV EXAMPLES OF COMPANIES APPLYING QFD 4.1 Service QFD Applications

Host Marriott

"Bagel Sales Double at Host Marriott." QFD applied to improving breakfast service at US airports. Shows before/after of sales volume and several customer satisfaction metrics.

Baptist Medical

"QFD Applications in Healthcare and Quality of Work Life." Excerpts

Center, TELUS

from Baptist Medical Center's QFD to establish a Diabetic Foot Clinic and TELUS, the Canadian communications company use of QFD to improve HR and job satisfaction.

"QFD for Service Industries: From Voice of Customer to Task

Japanese Technical Translation Service

Deployment." Comprehensive use of QFD in a Mazur's own language translation business, from identification of organizational goals, to customer selection, needs gathering, process reengineering, and deployment to individual jobs.

"QFD to Design a Course in TQM at the University of Michigan." Identifies

University of Michigan College

university customers as both future employers and students. Deploys their needs to both curriculum and class format.

of Engineering "Quality Infrastructure Improvement: Using QFD to Manage Project National City Bank

Priorities and Project Management Resources." Information Technology (IT) Department projects at financial institution are prioritized based on impact on internal and external customers, project risk, and project complexity.

4.2 Product QFD Applications 28

"Using QFD to Improve Technical Support to Make Commodity Products GCC Rio Grande Cement

More Competitive." A cement company uses QFD to push back competitors through superior customer service and technical support, instead of reducing price.

"QFD Killed My Pet Project." A high tech manufacturer learns before it

Fusion UV

is too late, that their latest technical marvel could actually hurt their customers' business. The project was stopped and refocused.

"QFD to Direct Value Engineering in the Design of a Brake System." QFD

Hayes Brake

is the front end to Value Engineering to create both a "value" brake system, as well as a new, high function design.

"Gemba Research in the Japanese Cellular Phone Market." Describes

Nokia

how Nokia customized their Voice of Customer research for the Japanese market, including segmentation criteria, training manuals, and cultural dos and don'ts.

"Improving Idea Development and Concept Optimization." Explains how

Rubbermaid

going to the gemba for consumer encounters at the earliest stages of concept ideation, resulted in better consumer acceptance and 50% higher sales forecasts for new products.

4.3 Healthcare and Medical Device QFD Applications

Baptist Medical

"QFD Applications in Healthcare and Quality of Work Life." Excerpts from

Center, TELUS

Baptist Medical Center's QFD to establish a Diabetic Foot Clinic and TELUS, the Canadian communications company use of QFD to improve HR and job satisfaction.

4.4 Entertainment and Theme Park QFD Applications

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"Jurassic QFD." QFD was used to design an animatronic Triceratops Universal Studios

for Universal Studio's new Jurassic Park. Going to the gemba helped the QFD team bring this animal to life, and win the Design Engineering 1999 Gold Medal.

Bibliography

1. Juran J. M.; Juran on planning on Quality ( Macmillian) 30

2. Crossby P.B.; Quality is free (Mc Graw Hill) 3. Fiegenbaum A. V.; Total Quality Control (Mc Graw Hill) 4. R. N. Gupta. Total Quality Management ( S.Chand & Sons) 5. www.isixsigma.com 6. www.qfd.com

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