Customer Relationships
(The Voice of the Customer)
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Session 4 - Customer Relationships
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Supplier - Process - Customer
Model
Supplier
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Process
Session 4 - Customer Relationships
Customer
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Two Approaches
• Customer Value Management (CVM) (ref: B.T. Gale, “Managing Customer
Value”)
• Quality Function Deployment (QFD) (ref: R. King, “Better Designs in Half the
Time”)
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Session 4 - Customer Relationships
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Customer Value Management
• Conformance Quality
• Customer Satisfaction
• Market-perceived quality and value relative
to competitors
• Quality a key to customer value
management
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CVM - Conformance Quality
• Conform to requirements
• Do it right the first time
• Reduce scrap and rework
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CVM - Customer Satisfaction
• Get close to the customer
• Understand needs and expectations
• Be customer-driven
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CVM - Market-Perceived Quality
• Get closer to the market then your
competitors do
• Use customer value analysis
• Understand why orders are won or lost
• Be market-driven
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CVM - Quality; a Key to CVM
• Use metrics and tools to:
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Track competitiveness
Decide on what business to be in
Make capital investments
Assess acquisitions
• Align entire organization with the evolving
needs of your targeted market
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Creating Value Customers Can See
Effective Design
& Quality Control
Understanding
Customer Needs
Superior quality
in areas that matter
to customer
Advertising & other
Communications
Market-perceived
Quality
Low Cost of Quality
& overall cost leadership
Exceptional Customer
Value
Business Result:
Profitability, Growth
Shareholder Value
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CVM - Seven Tools
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The Market-perceived quality profile
The relative price profile
The customer value map
The won/lost analysis
The head-to-head area chart of customer value
A key event time line
A what/who matrix
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Steps to Create Quality Profile
• Ask customer to list factors other than price that
are important to them
• Establish how various quality attributes are
weighted
• For each attribute divide your score by
competitor’s and multiply by the weight of that
attribute
• The total of all weight-ratio products is the overall
market-perceived quality score
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7
6
8
8
10
0.714
1.5
1.25
1.125
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Session 4 - Customer Relationships
Weight x Ratio
Ratio
5
9
10
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Relative
Weight
Competitior
Quotes
Delivery
Quality
Reliability
Service
Totals
Us
Example
5
3.75
25
37.5
40
50
20
22.5
10
10
100 123.75
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Customer Value Map
Worse Value
Fair-value Line
Better Value
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Won/Lost Analysis
• Ratio of number won to number lost
• Why won?
• Why Lost?
• Who Won?
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Head-To-Head Chart
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Who/What Matrix
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X
X
XX
XX
X
X
Service
XX
XX
Quallity
Assurance
Manufacturing
Comfort
Safety
Service
Reliability
Repairability
Engineering
Quality
Attribute
(XX = Primary, X = Support)
X
XX
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Quality Function Deployment
(QFD)
• Quality: Works right first time; fitness for use;
meet requirements; of value to customer
• Function: Research, design, manufacturing,
quality, sales, etc.
• Deployment: Put into effect, systematic
prioritization - Pareto principle
• QFD: A system for designing a product or service
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QFD Elements
• Inputs: Customer demands, company’s current
performance, competitors performance company ratings,
and sales features
• Outputs: 3 or 4 quality characteristics
– Compares customer demands w/ quality characteristics
– Weights company’s current performance, plans, sales
features and competitor performance
– Develops initial plan for meeting customer demands
– Prioritizes customer demands
– Develops which quality characteristics are controllable
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How QFD Works
• Organizing the QFD Project
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Extent of study
Who is the study for
Project selection
Team selection
Statement of theme
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How QFD Works
• The descriptive phase
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Customer demands
Quality characteristics
Functions
Mechanisms
Parts
New technology
New concepts
Product failure modes
Part Failure modes
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How QFD Works
• The breakthrough phase
– Creativity - combining two items in a new way
– Form matrices by combining various categories from
the descriptive phase
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How QFD Works
• Implementation phase
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Product planning
Product design
Production preparation
Regular production
Sales and service
Comprehensive monitoring
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Levels of Detail
Product
Car
System
Car Chassis
Sub-system
Components
Parts
Raw Materials
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Session 4 - Customer Relationships
Door
Door Handle
Opening Lever
Steel Alloy
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Benefits and Results
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Strategic choices for increased market share
Better communications between departments
Focused effort
Reduced engineering changes on critical design elements
Better control of critical elements of critical designs
Better reliability of critical design elements
Openness to new concepts
Cost reduction (VE integrated with QFD)
Competitive benchmarking
Cross training of design engineers
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Benefits and Results
• Better understanding of:
– customer demands
– different customers
– conflicting customer demands
– engineering requirements
– conflicting engineering requirements
– quality in general
– market research
– planning - individual efforts fir into product
• Improved structure of the design process
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Benefits and Results
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Establishes a critical path
Build in quality upstream
Improved documentation
Common language for all departments
Identifying customers
Break down walls
Make quality real - touch, taste, feel
Improve internal budgeting (potentially)
How individual efforts fit into product
Why designs are set the way they are
Potentially early identification of conflicting Substitute Quality Characteristics
- down stream fixing user problems without causing other problems
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Most Frequent QFD Errors
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Charts too big. Chart A-1 is a Pareto chart - not improved by more items
Using only Chart A-1:
– Not knowing in written detail what the customer wants
– Not doing something about it is probably worse
– Putting everything (e.g. cost, reliability, wants, functions) in the chart is often confusing and
misleading
QFD if mandated. QFD if propely done, is complex. As a ritual it will not be understood
Parts should not be mixed with substitute quality characteristics
– Parts belong in A-4
– Parts are different from quality characteristics
Engineering and customer demands should not be mixed
– Customer demands should be in Chart A-1
– Engineering demands should be in Chart A-2
Customers should not be asked about things they know nothing about
Do QFD when it is too late to make changes or there is no buy-in for changes
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How to Select and Facilitate QFD
Projects
• Select
– Identify project that support company priorities
– Select projects that will improve key interfaces
– Involve personnel who believe QFD will work
– Select projects that are likely to succeed
– Select projects that are likely to generate significant success
• Facilitate
– Clearly define the project
– Obtain management commitment to take action on findings
– Focus on process rather than contents of project
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