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Assessing the Alignment
of Competitive Priorities
and Action Plans Through
*
the use of QFD
Alinhamento entre Prioridades Competitivas e
Planos de Ação Através do Uso do QFD
PAULO A. CAUCHICK MIGUEL
Universidade Metodista de Piracicaba
pamiguel@unimep.br
ROSÂNGELA M. VANALLE
Universidade Metodista de Piracicaba
rvanalle@zaz.com.br
ALCEU G. ALVES FILHO
Universidade Federal de São Carlos
alceu@power.ufscar.br
ABSTRACT – This paper deals with the issue of strategic planning in which QFD is used to assessing the alignment
between manufacturing priorities and action plans through an exploratory case study. On the basis of manufacturing
competitive priorities obtained in a previous study, a quality matrix is applied to relate competitive priorities and action
plans. The case study is performed in an automotive industry supplier which produces brake systems. The results of the
QFD matrix is used to discuss the competitive priorities and verify the consistency with their action plans.
Keywords: COMPETITIVE PRIORITIES – QFD – QUALITY FUNCTION DEPLOYMENT – STRATEGIC PLANNING.
Resumo – Esse trabalho aborda o tema do planejamento estratégico no qual o QFD é usado para verificar o alinhamento
entre as prioridades de manufatura e planos de ação, através de um estudo de caso exploratório. Com base nas prioridades competitivas de manufatura, obtidas através de um estudo anterior, uma matriz da qualidade é elaborada para relacionar as prioridades competitivas com os planos de ação. O estudo de caso é realizado em um fornecedor da indústria
automotiva que produz sistemas de freio. O resultado da matriz de QFD é usado para discutir as prioridades competitivas
e verificar a consistência com os respectivos planos de ação.
Palavras-chave: PRIORIDADES COMPETITIVAS – QFD – DESDOBRAMENTO DA FUNÇÃO QUALIDADE – PLANEJAMENTO
ESTRATÉGICO.
*
Most part of the contents of this work was presented at the 11th Symposium on Quality Function Deployment, held in Novi, MI, USA, 12-18
June, 1999.
REVISTA DE CIÊNCIA & TECNOLOGIA • V. 8, Nº 16 – pp. 19-30
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INTRODUCTION
T
he process of formulating Manufacturing
Strategies has long been recognized as constituting an important gap in this area’s theoretical development. Leong et al. (1990), for instance,
pointed out the need for empirical studies aimed
at clarifying how organizations prepare their manufacturing strategies. Mills et al. (1995) argued
that perfecting processes for the development and
implementation of strategies is still a significant challenge for researchers and professionals.
Two principal factors account for the lack of
more systematic studies (both theoretical and
empirical) on Manufacturing Strategies formulation
processes: the as yet restricted dissemination of the
concepts concerning this area and, as a result, the
difficulties involved in finding organizations that
consciously and implicitly attempt to implement
Manufacturing Strategies. It must be admitted that
other approaches, such as Total Quality Management (TQM) and Computer Integrated Manufacturing (CIM), or even Lean Manufacturing, albeit a
part of manufacturing strategies, have been implemented more frequently and systematically by companies.
Systematization of formulation processes,
therefore, also requires a number of studies over a
long period of time, since there are numerous and
complex factors that condition and determine the
processes (both formal and informal) of formulation of strategies in companies, as well as the implementation of those strategies. These difficulties,
however, have not prevented the proposal of conceptual structures and methods for the formulation
of manufacturing strategies by several authors,
while continued efforts are directed at the study of
the “practice” of strategic manufacturing planning.
The basic objective of this work is to define a procedure to relate manufacturing strategies and programs (action plans) to achieve them. Moreover,
these programs should be prioritized. In order to
complete these tasks, QFD methodology is applied.
Although QFD has been applied for mainly product
development, it is applied here for analysing strategies and studying the QFD application as a potential
tool applied to strategic planning formulation. The
process were conducted based on a previous study,
20
through collected data of two autoparts companies.
The main methods and conceptual structures proposed for manufacturing strategy processes in the
literature are briefly reviewed as well, followed by
the QFD proposed application.
APPROACHES TO
MANUFACTURING
STRATEGY FORMULATION
There appears to be a consensus in the literature about the importance of formulation and
implementation of Manufacturing Strategies for
companies, which aim to base corporate strategy on
the search for competitive advantages. Most of the
literature has focused on the “content” of manufacturing strategies, i.e. competitive strategies, areas of
decision, and programs/action plans for development of competitive strategies in manufacturing.
On the other hand, the “process” of formulating
manufacturing strategies has received less attention
and still merits deeper study. Some of the most significant contributions on this process are highlighted below.
Mills et al. (1995) seek to enumerate and discuss the different factors that may influence the process of Manufacturing Strategy formulation and,
hence, the project of the formulation process, based
on a conceptual structure where this process is contingent on the model of the Manufacturing Strategy
“content” adopted. In other words, how a company
envisions its competitive strategies and the manufacturing decision areas, the qualities required to
achieve the desired results of the process, the company’s internal and external context. These two latter aspects are based on the strategy process modes
(entrepreneurial, planning, ideological, adaptive, or
grass roots – generative), cultural factors and competitive forces that are present in the company’s
market structure.
Four aspects listed by Platts (1994) for the
process of manufacturing strategy formulation are
part of this broader structure: point of entry (what
leads a company to implement the process of preparing its manufacturing strategies?), participation
(who participates in the process?), procedure (auditing, action plans and implementation), and the
project and process management (how the imple-
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mentation project and processes should be managed). Of these aspects, the present study covers
manufacturing strategy procedure. A brief description of the principal methods listed in the literature
for manufacturing strategy formulation is given
below.
The Hill Approach
The Hill approach (Hill, 1993) consists of a
five-step procedure. The first step involves understanding the organization’s long-term corporate
goals in light of the future manufacturing strategy
contribution toward those goals. Each company
goal is different in nature and emphasis, reflecting
the character of the economy, markets, opportunities, and the preferences of those involved.
The second step consists of understanding
how the organization’s marketing strategy has been
developed to attain corporate goals, identifying the
product and service markets that must be satisfied
by the manufacturing strategy. Additionally, characteristics of those products and services, such as the
extent, mix and volume that manufacturing are
required to supply, should be identified.
The third step is to evaluate how different
products will “qualify” in their respective markets
and how they will be order winners in relation to
their competitors. The task of a manufacturing
strategy is to provide the criteria needed to qualify a
company’s products to get orders from the market
more and better than the functions of its competitors’ manufacturing does. To qualify, a company
must be as good as its competitors. To get orders, it
must be better than its competitors. Qualifying is no
less important than getting orders – they are two
different things. Both are essential if the company
wishes to maintain its market position and grow.
The fourth step establishes the most suitable
process to manufacture these products (choice of
process). Its objective is to define a set of structural
manufacturing characteristics that are mutually consistent and suited to how the company wishes to
compete. In other words, manufacturing must
chose from a number of process alternatives to
manufacture its products.
The fifth step, which consists of non-process
manufacturing characteristics, must provide the
REVISTA DE CIÊNCIA & TECNOLOGIA • V. 8, Nº 16 – pp. 19-30
infrastructure needed to support the manufacture of
these products. It covers the procedures, systems,
controls, work structure, organizational structure,
and others involved in non-process aspects of manufacturing.
The objective of using this structure is to produce a Manufacturing Strategy for a business (steps
4 and 5). In every instance, this includes a review of
both existing and new products. Moreover, this
review is based on current and future market expectations, since manufacturing must provide support
for the product (i.e. aftersale services) throughout its
lifecycle and not just part of it.
This methodology is not restricted to a simple
sequential progression of step 1 through 5,
although, during the formulation process, the
emphasis does move in that direction. Conversely,
Hill (1993) sees the process as interactive, while
managers alternate between an understanding of
the organization’s long-term strategic needs and the
specific development of resources required to support the strategy. In this interactive process, identification of the competitive factors of step 3 is seen as
critical. In this step any divergence between what
the organizational strategy demands and what manufacturing can supply comes to light.
The Platts-Gregory Approach
The Platts-Gregory approach (Voss, 1992)
contains a theoretical contribution for a better
understanding of the elements of a process of strategy formulation, generating a prescriptive model for
manufacturing strategy. An analytical and rational
process structure is adopted that provides an auditing methodology to enable companies to develop
their manufacturing strategies.
The auditing procedure aims, through a logical procedure, to lead the user to identify the objectives of manufacturing, its current performance
levels, and the changes that will be required. The
procedure is divided into three steps:
The step 1 develops an understanding of the
organization’s market position. This is done by evaluating the company opportunities in and threats
from its competitive environment. Specifically, it
seeks to identify market demand factors (characteristics, quality, delivery, flexibility and price) and
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compare them with the level of performance
achieved (how manufacturing responds to these factors to meet market demands).
The objective of the second step is to evaluate
manufacturing capabilities (facilities, capacity, scope
of the process, processes, human resources, quality
and control policies, suppliers and new products).
Its purpose is to identify current manufacturing
practices and evaluate the extent to which these
practices help the company achieve the kind of performance that has been indicated in step 1 as being
important.
Step 3 deals with the development of new
manufacturing strategies. It involves reevaluation of
the different options available to the organization
and selection of those that best meet the criteria
identified in the two previous steps.
The audit can be done using worksheets for
each stage of the process (such as the need to review
manufacturing strategy, selection of product families
that are the most significant ones for the business,
identification of important competitive criteria,
identification of areas where fragility contributes to
unsatisfactory performance or vulnerability, identification of opportunities and threats, developing
alternatives to form the basis of a new strategy). The
worksheets also permit tracing strategic choices and
action plans; the logic and data of the analytical part
of the process are stored and can be reviewed periodically to check if the strategy basis is still adequate.
The Slack Approach
Slack (1991) states that there are several ways
of grouping together the stages of strategic formulation and that the procedures tend to follow a like
pattern and to share a common philosophy, known
as the gap methodology, which consists of four
steps.
The first step consists of establishing manufacturing objectives. The starting point for any functional strategy is to examine its role in improving
competitiveness as a whole. The competitive strategy must be translated into manufacturing objectives, which should result in a clear set of objectives
for the competitive performance of each product or
group of products, and a vision of the future that
distinguishes between the manufacturing function’s
22
capacities that will need to be developed and those
that could require development.
The objectives should be determined by consumer needs. The customers define what is important for manufacturing. Their needs must be
translated by manufacturing strategy directly to the
shop floor level. Customer priorities should be manufacturing priorities, and customer concerns should
be manufacturing preoccupation. This means evaluating the relative importance of each of the objectives of manufacturing performance. Some type of
scale of relative importance must be established to
aid this process. This is done based on the customer
point of view, where the relative importance of each
performance objective can be indicated for each
product or group of products. The performance
objectives can be classified as “order winners”,
“qualifiers”, and “less important”. An operation will
normally require use of a more discriminating scale
to judge the relative importance of the competitive
sectors, i.e. it will have to divide each category into
three, representing strong, average and weak positions.
The second step should evaluate the real performance achieved by the manufacturing function.
Within a strategic context, performance measurements (price, quality, flexibility, reliability of delivery,
time) only take on any degree of significance when
they are compared against competitor performance.
Each performance objective must be placed in
a relative position on some kind of scale. This scale
must indicate, for each performance objective,
whether the performance is better, the same, or
worse than that of its major competitors. However,
again, more rather than less discrimination is often
useful. Slack (1991) proposes a nine-point scale.
The third step consists of prioritization
through the importance/performance gap. It is the
gap between the classification of the importance of
each performance objective and the classification of
the performance of that objective that is the guide to
the establishment of priorities. The priority for
improvement that should be given to each competitive factor can be evaluated based on its importance
and its performance. This can be done through an
importance-performance matrix that, as its name
denotes, positions each competitive factor accord-
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ing to its scores or classifications within these criteria. The matrix considers the two scales that should
be developed in steps 1 and 2. The “importance”
scale indicates how customers see the relative
importance of each performance objective, while
the “performance” scale classifies each performance
objective against the levels achieved by the competition.
It must be kept in mind, however, that no
scale is static – both scales classify the positions in
relation to a dynamic external standard. Customer
preferences change as the market develops and the
economic environment is altered. Hence, in the
same way, it is highly improbable that the competitors remain immobile.
The importance/performance matrix is
divided into four zones. These zones locate the performance of each competitive priority. By means of
this location, it is possible to make a comparison
between the importance and the performance of the
objectives. This serves as an important guide to indicate which, among the several aspects of performance, requires improvement and how urgent such
improvement is. It does not, however, indicate how
performance should be improved.
The fourth step consists of the development
of action plans. The entire operational staff should
be involved in and responsible for the creation of a
set of imaginative and practical action plans. A useful approach is to examine the influence that each
area of activity has on each performance objective.
Starting with the highest priority of the performance objectives, this means asking what contributions toward improvement could derive from
changes in operation process technology, in the
operation’s organization, in the development of its
human resources and in its supply chain, in terms of
both information and material flow.
Slack (1991) also states that often lack of success comes in the state of implementation, which is
the most difficult one. A schedule for implementation must be established, as well as a list of general
issues, the solutions to which will be used to establish the basic plan for implementation. The issues to
be considered are: “when is the best moment to
start?”, “where, within the organization, could
REVISTA DE CIÊNCIA & TECNOLOGIA • V. 8, Nº 16 – pp. 19-30
improvement begin?”, “at what speed should the
program be developed?”, and “how should the process of improvement as a whole be coordinated?”
The procedures for formulation described
herein are, generally speaking, representative of
those available in the literature, although they
present different emphases. One example of this is
that: while the Hill (1993) methodology emphasizes the development of a manufacturing strategy
based on the point of view of competitive consumer
factors, Platts-Gregory (Voss, 1992) makes a comparison between what the market wants and the
performance of manufacturing. Hence, it is similar
to the importance/performance matrix developed
by Slack (1991).
QFD APPLICATION IN
STRATEGIC PLANNING –
A BRIEF REVIEW
QFD has been applied in a wide range of subjects; not only for developing products and services
but also for defining organizational structures (e.g.
see Jacobs & Dygert, 1997; and Hales, 1998). QFD
can also be used in strategic planning, although
there are differences when applying it to developing
manufacturing strategy and resolving manufacturing strategic issues. Table 1 highlights these differences.
Further discussion regarding table 1 can be
found in Crowe & Cheng (1996). However, it is
worth mentioning that the authors argue that in the
product design process, customers’ requirements
and preferences are somewhat more static in nature,
whereas in competitive business environment, the
competitive priorities are more dynamic. In some
cases such an affirmation is not entirely true, i.e.
there are industrial sectors where the product design
process must be very dynamic such as in the computing and software industries.
Figure 1 illustrates the three phases of strategic planning through the use of QFD, as suggested
by Crowe & Cheng (1996). These phases are: functional strategies, manufacturing priorities, action
plans, and detailed tasks.
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Tab. 1. Fundamental differences between product design and strategic planning (Crowe & Cheng, 1996).
PRODUCT DESIGN
STRATEGIC PLANNING
Input data
Number of translation phases
Information nature
Translation data
Evaluation scale
Team members
Output
Project risk
Customers' requirements
Four clearly defined phases
Static
Easy to define and quantify
Specific target values for each design attribute
Implementation engineers
Corporate and business strategy
Multiple phases
Dynamic
Difficult to define and qualify
Strategic objectives and goals
Top management, functional level managers and implementation engineers
Specific process for manufacturing the
Manufacturing initiatives, tactical policies and detail tasks
product
Generally lower
Generally higher
Fig. 1. Manufacturing strategic planning (adapted from Crowe & Cheng, 1996).
As discussed by Crowe & Cheng (1996), in
the first stage all functional level strategies are realised and they become the whats for the next stage.
In the second stage, all parallel functional level strategies are their potential customers. For example,
marketing requirements can be an input to the QFD
matrix and the output would be a set of manufacturing priorities to fulfill the requirements. In the
third stage, broad manufacturing priorities are
translated into detailed action plans for implementation. The last stage is identifying specific tasks to realise the plans. As can be seen in figure 1, the
structure of the house of quality is also different
from that used in product design.
24
Other authors mention that QFD has been
successfully applied in strategic planning. It can be
cited the work of Maddux et al. (1991), Lyman et
al. (1994), Lu & Kuei (1995), and Lowe & Ridgway (1997). Next section presents an exercise of a
QFD application to relate competitive priorities and
action plans.
QFD APPLICATION IN
STRATEGIC PLANNING –
A CASE STUDY
It is relatively well-known that organisations
must define their corporate strategies in order to be
competitive in the current fierce economic environment. Some authors have stated that there is a gap
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between corporate strategy and manufacturing. To
extent this, many companies do not have explicit
manufacturing strategies even though the importance of such strategies is appreciated. To extend
this yet further, there should be an effective way to
deploy their corporate strategies into manufacturing
strategies, and the manufacturing strategies into
programmes. Many approaches have been proposed for manufacturing strategic planning, but few
systematic methodologies have been developed.
Quality Function Deployment (QFD) can be used
as a systematic tool to apply for both strategic formulation and to deploy them into manufacturing
strategies. This section examines an exploratory
study in which QFD is used to strategic planning
formulation. A QFD matrix is used to relate the
manufacturing strategies and programmes to
achieve them.
As mentioned earlier, companies do not have
a precise definition of their manufacturing strategies
even though the importance of such strategies is recognised. The main objective of this study was to
develop the application of QFD methodology in
order to relate the company stated manufacturing
strategies with its programs (action plans). Subsequent aim was to compare the achieved results to a
previous work carried out by Vanalle & Alves Filho
(1997). This work (Vanalle & Alves Filho, 1997)
also served as source of data from the companies.
The process resulted in the matrix of quality presented later. The matrix was used to quantify the
relative importance of company programs the manufacturing priorities fulfill.
The study has been conducted with two companies named here “A” and “B”. Company “A” is the
one where the analysis were performed while company “B” is the competitor used for comparative
purpose. Company “A” supplies brake systems for
Chrysler (export), Ford and General Motors (for
both export and local market), and other automotive manufacturers (e.g. VW). Approximately half
of the company’s turnover comes from contracts
with the US big three companies. The company has
two plants which produces brake discs, callipers,
servo cylinders, wheel and cylinders, brake assembly, and air compressors for heavy vehicles (buses
and lorries), and ABS brake systems. Besides the
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Brazilian plants there are one in the USA (the company is there since 1981 but the plant is more
recent), and another one in Argentina (since 1991).
Both companies are within the automotive sector;
they supply to the OEM in Brazil and abroad, e.g.
General Motors, Volkswagen, Fiat, Scania, Volvo,
Ford (USA), Chrysler, Toyota, and others. They also
supplies to aftermarket. Table 2 shows information
about the two companies.
Tab. 2. Profile of the companies.
COMPANY
"A" (STUDIED
COMPANY)
Annual Turnover
(million US$)
Approximate Number
of Employees
Year of foundation
Market share
Export Sales
Domestic Sales
COMPANY "B"
(COMPETITOR)
221
100
2000
800
1945
35%
35%
65%
1950
60%
10%
90%
Traditionally, QFD has been applied to product development by translating customer requirements to critical design characteristics, component
characteristics, process control characteristics, and
operational instruction (considering here as the
four-stage approach presented by Hauser & Clausing 1988). However, when QFD is used in strategic
planning, there is a different perception of these
concepts. Broad manufacturing priorities should be
translated into programs or action plans for implementation. This is the third stage identified by
Crowe & Cheng (1996) as four stages of QFD
exercise for manufacturing strategic planning.
Descriptors collected from company “A” for analyzing manufacturing priorities criteria were:
• low price;
• reactive to market (mix);
• reactive to customer orders;
• fast design changes;
• fast product distribution;
• reliable product distribution;
• production technology updating;
• customer service department;
• consistent quality (conformity);
• high quality products.
They can be grouped into the broad manufacturing priorities defined by Hayes & Wheelwright
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(1984): cost, services, flexibility, and quality, becoming the first level in the quality table (see table 3).
The company representatives also weighted the
manufacturing priorities criteria using a rate of
importance, as can also be seen in table 3. Note that
the criteria were ranked from cost (5) to quality (2).
This rank implies that cost are the most important
priority and quality the least. The company representative, who has a good knowledge and understanding of the process, provided the rates. Is must
be mentioned that quality is the least important priority since company “A” has already achieved a reasonably high level quality either in its products or in
its quality system. For instance, the commitment of
company “A” with quality system certification can be
traced back to 1986, when it received Ford Q1 certificate. The company initiated the ISO 9000 certification in the beginning of 90’s and the first plant was
certified in October 1992. For QS 9000 certification,
the previous ISO 9000 experience allowed a more
smoothly process since the company has already had
its own approach to QS 9000 process of certification
(Cauchick Miguel, 1998a, 1998b).
Tab. 3. Quality table for manufacturing priorities.
LEVEL 1
LEVEL 2
IMPORTANCE
Cost
Flexibility
Services
Quality
Low price
Reactive to market (mix)
Reactive to customer orders
Fast design changes
Fast product distribution
Good customer relation
Reliable product distribution
Product technology updating
Manufacturing technology updating
Customer service department
Consistent quality (conformity)
High quality products
5
5
4
3
3
3
3
3
3
2
2
2
The next step, applying the conventional
approach, the manufacturing priorities would have
to be translated into detailed action plans for implementation. However, this was not the case in this
study, since these plans were available, i.e. the studied company has already implemented a number of
action plans (programs). Generally speaking, companies do not have clearly stated what their manufacturing priorities are, so that they usually implement a
26
number of action plans in various company functional areas. This study intends to check the consistency of the implemented programs (action plans)
regarding the manufacturing priorities in addition
to understanding the interaction between programs
and manufacturing priorities. Some of the action
plans took in place were:
• labour training;
• work automation;
• flexible manufacturing systems;
• computerized information system for manufacturing;
• production and inventory control;
• performance measuring system;
• statistical process control;
• quality control circles;
• improved capacity of new products introduction.
Having both information, i.e. the set of the
manufacturing priorities and the group of programs, the matrix of quality can be constructed.
This matrix is shown in figure 2. The relation
between the manufacturing priorities and programs
were identified. They were ranked as strong (9),
moderate (3) and weak (1). Relationship which do
not apply were left in blank.
With all the ‘whats’ and ‘hows’ defined and
recorded in the matrix, it was attempted to determine other factors related to manufacturing priorities: the currently company position regarding the
priorities, the competitor position, and the quality
plan. After considering the most important sales
point, the rate of improvement was calculated as
well as the absolute and relative weight. It is important mentioning that for the sake of simplicity, the
roof of the quality matrix was omitted in this study.
In the bottom part of the quality matrix,
benchmarking data were used as well. The comparison was made based on data of a direct competitor,
named here company “B” (see table 2).
The complete matrix of quality (fig. 2) reveals
which programs are the most important, i.e. the
design issues related to manufacturing priorities. In
redesign the programs, the focus should be on these
issues. In addition, detailed tasks related to these
issues should also be contemplated. Considerations
may also be given to other factors which are directly
related.
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Fig. 2. Relating competitive priorities and action plans through a quality matrix.
As mentioned before, some of the company
data was obtained from a previous empirical study
conducted by Vanalle & Alves Filho (1997). They
work on defining the manufacturing priorities and
relate them to the action plans. Therefore it is useful
and relevant to compare the results when using a
speculative study and a more precise one through
the application of QFD.
DISCUSSION
The application discussed here demonstrates
the power of QFD as a systematic and structured
framework when formulating manufacturing priorities and determining their relation with programs.
Comparing the obtained results with the empirical
study carried out by Vanalle & Alves Filho (1997), it
can be seen common points found out on both
study. The manufacturing priorities are equal and in
the same order. Actually, this is not a significant
achievement since part of the data were common.
However, due to the fact that raw data were used,
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there are differences when conducting the study
using QFD, i.e. the investigation framework is distinct when considering the data as the voice of customer collection.
The studied company considers ‘quality’ as
the last important priority. This can be explained
due to the fact that this company has already
achieved high quality standards for its products and
services. For example, the company commitment to
quality can be traced back to 1986, when it received
Ford Q1 certificate. The company initiated the ISO
9000 certification in the beginning of 90’s and was
certified in October 1992, which is a quite good
achievement since there were only 96 certified companies in Brazil. Additionally, it was the fourth company to comply with QS 9000 in Latin America (in
March 1998). The previous quality experience
allowed a more smoothly process towards QS 9000
certification.
The sequence of company priorities (cost,
flexibility, services, and quality) is in agreement with
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the cone sand model (see figure 3), proposed by Ferdows & De Meyer (1990). The idea is that the
company should build the priorities using the
sequence suggested in figure 3, i.e. quality, services,
flexibility, and finally cost. Although there are controversial discussion regarding this model (see e.g.
Wassenhove & Corbett, 1993; and Alves Filho et
al., 1995), the studied company structure is in
accordance to some extent to part of the literature
of strategic planning.
Fig. 3. Cone sand model of priorities (Ferdows & De Meyer,
1990).
C
F
S
Q
C - Cost
F - Flexibility
S - Service
Q - Quality
When comparing the performance of company “A” with the competitor, company “B”, the
QFD results are also consistent with the reality of
the these companies in the market. It is known by
the authors, based on the literature (Vanalle & Alves
Filho, 1997), that the performance of the studied
company is similar to the competitor in costs but
company “A” performance is much better in terms
of quality. The performance in quality is reflected by
the sequence of manufacturing priorities, i.e. for
company “A” quality is the last priority, while for
company “B” it is the first one. Some performance
indicators also point out this statement, as shown in
table 4.
Regarding programs, they can be evaluated
and prioritized according to the results from the
matrix of quality. The programs with higher importance, i.e. absolute and relative weight, were: ‘performance measuring system’, ‘manufacturing
computing information’, and ‘production and
inventory control’. Once again, when comparing
the results with the empirical study, QFD application is effective. For instance, ‘performance measuring system’, which consist of performance measures
for cost, quality and productivity, are those provided
by the company as a way to evaluate and benchmark its performance. In the priority ‘cost’, which
has a high level of importance, the company performance rating is not good (1, in a scale from 1 to 5,
being 5 the most highest rate). Moreover, the com-
28
petitor rate is better than the studied company, in
contrast with the reality in the market (similar performance as stated earlier in this text). However, it is
clear the company concern to measuring cost factors through indicators such as:
• R&D investment as a percentage of turnover;
• investment in equipment as a percentage of turnover;
• cost of the rejected part over total manufacturing part cost;
• cost of the reworded part over total manufacturing part cost.
The program ‘production and inventory control’ is also related to ‘cost’ since an effective and
efficient stock control represents low inventory and,
as a consequence, lower costs. The program ‘manufacturing computing information’ is aligned with
the second most important priority: ‘flexibility’.
Data information available on line and in real time
usually represent flexibility in terms of reaction to
customer orders (volume) and, in a certain way,
reaction to market (mix).
Tab. 4. Quality performance indicators.
COMPANY "A"
Use of SPC in the shop
98
floor (%)
Scrap (%)
0,8
Supplier qualification (%)
20
Training (hours/
more than 200
employee/year)
Quality System
ISO 9001, QS 9000,
Certification
EAQF, VDA 6
Quality Costs System
Extensive
COMPANY "B"
40
1,5
0
between 100
and 200
ISO 9001, QS
9000
Basic
CONCLUDING REMARKS
Undoubtedly, QFD is a powerful methodology to help with complex decisions. It can be customised to the particulars of problems. This is
especially true when dealing with information system, e.g. strategic planning. QFD can lead the users
through complex decisions, providing a structured
view of fuzzy issues. Of the many new tools currently available to support decision-making process,
QFD may offer many advantages over them.
Based on the results of the QFD exercise, this
exploratory study can be regarded as successful in
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order to analyse the potentialities of QFD on the
subject of strategic planning. One of the better
advantages is to prioritise the action plans (programs). This is very important for developing countries due to the rather constant economic changes.
However, this exploratory study was not specifically
designed for the purpose of QFD implementation
so that some difficulties have arisen. Some of the dif-
ficulties were regarded to the interpretation of the
voice of customer, usage of alternative mechanisms
to extract customer data (e.g. interviews), and the
necessary top management company commitment
when applying QFD. Further work will concentrate
in a complete QFD application in a cosmetic division of a large corporation in order to developing its
strategic planning.
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