Customer Relationships

Customer Relationships (The Voice of the Customer) Session 4 - Customer Relationships

Supplier - Process - Customer Model Supplier Process Customer Session 4 - Customer Relationships

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”) Session 4 - Customer Relationships

Customer Value Management • Conformance Quality • Customer Satisfaction • Market-perceived quality and value relative to competitors • Quality a key to customer value management Session 4 - Customer Relationships

CVM - Conformance Quality • Conform to requirements • Do it right the first time • Reduce scrap and rework Session 4 - Customer Relationships

CVM - Customer Satisfaction • Get close to the customer • Understand needs and expectations • Be customer-driven Session 4 - Customer Relationships

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 Session 4 - Customer Relationships

CVM - Quality; a Key to CVM • Use metrics and tools to: • 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 Session 4 - Customer Relationships

Creating Value Customers Can See Effective Design & Quality Control Understanding Customer Needs Superior quality in areas that matter to customer Advertising & other Communications Low Cost of Quality & overall cost leadership Market-perceived Quality Exceptional Customer Value Business Result: Profitability, Growth Shareholder Value Session 4 - Customer Relationships

CVM - Seven Tools • 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 Session 4 - Customer Relationships

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 Session 4 - Customer Relationships

Example Session 4 - Customer Relationships

Customer Value Map Worse Value Fair-value Line Better Value Session 4 - Customer Relationships

Ratio of number won to number lost Why won? Why Lost? Who Won? Won/Lost Analysis Session 4 - Customer Relationships

Head-To-Head Chart Session 4 - Customer Relationships

Who/What Matrix (XX = Primary, X = Support) Session 4 - Customer Relationships

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 Quality Function Deployment (QFD) Session 4 - Customer Relationships

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 QFD Elements Session 4 - Customer Relationships

Organizing the QFD Project Extent of study Who is the study for Project selection Team selection Statement of theme How QFD Works Session 4 - Customer Relationships

The descriptive phase Customer demands Quality characteristics Functions Mechanisms Parts New technology New concepts Product failure modes Part Failure modes How QFD Works Session 4 - Customer Relationships

The breakthrough phase Creativity - combining two items in a new way Form matrices by combining various categories from the descriptive phase How QFD Works Session 4 - Customer Relationships

Implementation phase Product planning Product design Production preparation Regular production Sales and service Comprehensive monitoring How QFD Works Session 4 - Customer Relationships

Levels of Detail Car Product System Car Chassis Door Sub-system Components Door Handle Opening Lever Parts Raw Materials Steel Alloy Session 4 - Customer Relationships

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 Benefits and Results Session 4 - Customer Relationships

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 Benefits and Results Session 4 - Customer Relationships

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 Benefits and Results Session 4 - Customer Relationships

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 Most Frequent QFD Errors Session 4 - Customer Relationships

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 How to Select and Facilitate QFD Projects Session 4 - Customer Relationships

Customer Relationships