House of Maretin Quality Usin the House of Quality to Develop Maretin Strateies Bayram Aslan, RWTH Rheinisch Westfälische Technische Hochschule, Aachen, Germany Helmut H. Hereth, (E-mail: hhh@ncsu.edu), NC State University ABSTRACT The paper presents a Model for Customer Oriented Maretin Strateies, usin the House of Quality Approach. The model is presented with an example of Spinnin Machinery Maretin. INTRODUCTION O ne of the fundamental problems in maretin is a lac of productivity measures or accountability. Typically productivity, efficiency, and effectiveness measures are applied to manufacturin environments, especially those with hih labor content. As cost factors shift in relevance from labor to overhead, productivity of nowlede worers and service worers, and corporate overhead cost becomes increasinly relevant as a rowin portion of corporate cost, maretin productivity becomes an increasinly relevant topic. While maretin productivity has been mentioned as a topic already in the 1950s and 1960s, (e.., Buzzell, 1957, Dean, 1960, Sevin, 1965), maretin departments never underwent the scrutiny that manufacturin and production were exposed to. At the same time, operations manaement started to emphasize customer focus, and the increased relevance of new product development led to tools that brouht customer focus and productivity toether for manufacturin, such as Total Quality Manaement, the House of Quality, Quality Function Deployment matrix, etc. While maretin provided a lot of input into product development, the customer focus and productivity of maretin was rarely in question. However, the area of industrial maretin already sees a lot of cooperation between maretin and enineerin and thus provides an opportunity to use some of the traditional enineerin tools and apply them to maretin. The paper applies the House of Quality approach to maretin strateies to create a House of Maretin Quality. HOUSE OF QUALITY OVERVIEW The basic concept of the House of Quality is conceptual framewor that lins customer requirements to technical enineerin parameters and provides the means for inter-functional plannin and communication (Hauser and Clausin, 1988; Xie, Tan, and Goh, 2003). The concept is shown in Fiure 1, showin the characteristic house shape with the center room focusin on the relationship between the customer requirements and the technical descriptors. This central room houses the quality deployment matrix or the voice of the customer. Here customer requirements or attributes are translated into technical characteristics (Xie, Tan, and Goh, 2003), enineerin characteristics (Hauser and Clausin, 1988), or manufacturin steps (Hereth, 2002, 2004). The other areas of the house serve to show prioritized customer requirements, prioritized technical descriptors, and interrelationships that will help in the plannin process. 83
Applied to real life scenarios there may be multiple steps (or houses), where customer characteristics (WHATs) et translated into enineerin characteristics (HOWs), then the enineerin characteristics become customer requirements (WHATs) for specific parts, and the part characteristics are the HOWs, and so on, throuh to the final production requirements. Fiure 1: House of Quality ((Xie, Tan, Goh, 2003) House of Maretin Quality Customer Requirements Usin of the House of Quality approach for maretin strateies is an attempt to structure the decision on maretin stratey components around customer requirements. While traditionally maretin implies a customer focus, maretin stratey decisions do not always eep this focus, and a structured approach may be very helpful. The basic idea of the approach is to eep the WHATs as customer requirements in mind, but lin them to maretin objectives and maretin stratey components on the HOWs side of the Quality Deployment Matrix. This process requires in a first step to identify and describe the customer requirements and to ran these requirements. This ranin needs to be weihed by also ranin the customer by relevance to the company. Within the relationship matrix these requirements and then lined to maretin strateies (HOWs) to evaluate how they may address costumer requirements. The oal is not to develop a product that solves customer problems, but rather to develop a maretin stratey that creates a ood customer relationship, and at the same time stayin within a iven budet. The necessary steps in developin such a House of Maretin Quality are illustrated usin the example of a spinnin machine manufacturer focusin on the German maret for spinnin equipment, specifically rotor spinnin equipment. The example has been developed with the help of Schlafhorst Saurer GmbH & Co. KG, but it is for illustration purposes only and neither reflects the actual maretin strateies of the company nor provides a complete list of customer requirements. Preliminary steps involve identifyin the taret maret and identifyin competitors within the taret maret. The first step towards the actual House of Maretin Quality then is surveyin the customers to collect data on customer requirements. This step tries to list the WHATs in different layers: 84
Primary customer requirements are typically rather vaue and eneral, and they are specified as secondary customer requirements. These secondary customer requirements provide more detail, but are not yet directly actionable. Specific, actionable requirements are tertiary requirements. An example of one of these customer requirements is shown in Fiure 2. Fiure 2: Example of a Customer Requirement In the example, c req describes the cost of findin customer requirements, which typically is part of the maretin budet. The list of customer requirements and their secondary and tertiary levels is typically establishes with the help of customers and the sales department. In the survey customers then ran the importance of the specific (tertiary) attributes on a scale of 1 to 5 or 1 to 10. Each of the customer requirements is raned by every customer surveyed. At the same time, the company may value different customers opinions differently, dependin on the importance of a particular customer to the company. Thus the customers are assined different weihts or importance factors. The customer responses are combined into consensus ranins by one of three methods: 1. Consider the maximum importance ranin only. In this case only the hihest score of all the customers is considered for each customer requirement. 2. Calculate an averae over all surveyed customers for each customer requirement, ivin each customer equal weiht. 3. Calculate a weihed averae over all surveyed customers for each customer requirement, considerin the relative importance of each customer to the company. In this method the consensus ranin R i for each requirement i is calculated as follows: 85
R i m ij i 1 m j 1 r I I j j (R i = consensus ranin for requirement i) (r ij = ranin for requirement i by customer j) (I j = relative importance of customer j for the company) The resultin table then loos somethin lie Table 1: Table 1: Consensus Ranin Now that there is a consensus measure of how relevant each of the customer requirements is, the customer requirements need to be lined to maretin stratey components. 86
Fiure 3: Example of Maretin Stratey Components 87
HOUSE OF MARKETING QUALITY MARKETING STRATEGY COMPONENTS While Table 1 shows the consensus ranins for the WHATs, the central room in the House of Maretin Quality lins these WHATs with the HOWs, in this case with the maretin stratey components. The maretin stratey components considered in this example are Product Plannin and Development, Distribution, Service, Promotion, and Pricin. Each of these components has several maretin manaement component alternatives. An example of these stratey components and the component alternatives is shown in Fiure 3. In this matrix customer requirements are lined to maretin stratey components. This is where the House of Maretin Quality departs from the traditional QFD matrix. With the help of team members from maretin, sales, and customer service as well as other functional areas of the company each maretin stratey components is lined to each customer requirement and their relationship is raned. Typically the deree of relationship is represented by a symbol (see Fiure 3 for an example), ranin from no relationship to very stron relationship. If there is no relationship, the cell remains empty. It may be useful to include customer representatives or intermediaries in the team that constructs this relationship analysis. Completin this relationship matrix can tae a very lon time as each individual potential relationship is addressed separately by the team. An empty row would indicate that the customer requirement is not bein addressed by any of the maretin stratey components and an empty column would indicate that this maretin stratey component is not relevant to any of the customer requirements. In a sense, the QFD matrix provides a playboo as to which maretin stratey components can be used to address specific customer requirements. This is important since different customers put different weihts on the requirements, and this way customer specific maretin strateies can be applied. For the overall maretin stratey the different stratey components and alternatives are weihted to obtain prioritized maretin stratey components. This happens in a matrix below the QFD matrix, in the basement of the House of Maretin Quality. There are four rows in this basement, first the absolute weiht of each component that is based on assinin numerical values to the relationship symbols, and than addin these values up for each maretin component alternative. At the same time we now that not all alternatives are equally easy to implement, and we also now that some strateies are more expensive than others. Adjustin the weiht of each alternative with a deree of difficulty of implementation (the second row of the basement) leads to adjusted weihts in the third row that can then be translated into percentae weihts in the fourth row. The symbols for Fiure 4 are as follows: w d wa wp : weiht with which : deree of difficulty for implementin : weiht with which : percentae adjusted weiht of alt affects customer requirements alt alt affects customer requirements adjusted alt 88
Fiure 4: Prioritized Maretin Stratey Components The basement provides a summary of the relative importance of different maretin stratey components in addressin weihted customer requirements. This is an important tool when it comes to decidin on alternative stratey components under budet restraints. Interrelationships between Maretin Stratey Components Different maretin stratey components may influence each other, either positively in the sense that they support each other, or neatively in the sense that they are competin with each other. Of course it is also possible that they do not have any influence on each other at all. The interrelationship matrix taes the shape of a trianle or the pitched roof of the House of Maretin Quality, and it summarizes all positive and neative relationships between the stratey component alternatives, based on the judment of the team. An example is shown in Fiure 5. 89
Fiure 5: Example of an Interrelationship Matrix, the Roof of the HMQ While the interrelationship matrix is not directly lined to customer requirements, it does show which components or alternatives have to be coordinated in order to achieve an effective maretin mix. The example shows thins lie a stron positive relationship between a competent sales force and stron after-sales service or a limited compatibility between direct sellin and offerin only one product. Areas that are not interrelated have less of a need for coordination. COMPETITIVE ASSESSMENT To the riht side of the center room we can create some competitive assessments, chartin the perceptions customers have about the company relative to competitors for each of the customer requirements. This is the arae within the House of Maretin Quality. This assessment is done for each customer requirement by the customers as well as by the company (self assessment), resultin in a consensus ranin. At the same time the customers can share their perceptions of how specific competitors ran for the requirements. This will lead to a profile showin the company relative to the competition, showin in what aspects the company is considered better or worse and thus showin areas with improvement opportunities, i.e., it provides some competitive benchmarin. Fiure 6 shows the competitive assessment and the competitive ranin for the example. 90
Fiure 6: Competitive Assessment and Benchmarin Example In Fiure 6 the followin symbols are used: c : the costs for assessin maretin activities ass z co : the y th competitor, y 1,, z y : the number of the considered competitors y p ij : the j th customers perceived quality of req i from P iy : the calculated consensus ran of req i of s ij co y : the j th customers perceived quality of the company co y S i : the calculated consensus ran of req i of the company 91
A similar competitive assessment can be performed for the maretin stratey components, ranin the company and the competitors for each of the components. The ranins are plotted below the relationship matrix, considerin the perceived quality of each requirement and the respective weiht the stratey component has for the requirement. This provides a benchmar analysis of the company based not on customer requirements but on the use of maretin stratey components. Just lie the requirement benchmarin it shows opportunity for improvements. Fiure 7 shows this sub-basement. Fiure 7: Benchmarin the Maretin Stratey Components SUMMARY AND CONCLUSIONS Fiure 8 shows the complete House of Maretin Quality with the customer requirements on the left, the maretin strateies and alternatives in the ceilin, and their relationship in the center. The basement evaluates and compares the maretin tools available to the company and how it benchmars aainst the competition, on the riht it shows how the company benchmars aainst the competition based on customer requirements, and in the roof it shows how different maretin stratey components are interrelated. The House of Maretin Quality and within it the Quality Function Deployment Matrix provide a systematic approach for developin and evaluatin a customer oriented maretin stratey. Used in a company this tool ensures that maretin stratey components are focusin on customers and address customer requirements. While this is often assumed to be the case with maretin efforts, the structured approach reatly reduces chances for hobby maretin efforts that fail to eep the customer in focus. Additionally, the House of Maretin Quality provides communication tool within company to focus strenths and resources. This is a very similar result as oriinally intended for the House of Quality, however now with a focus on maretin stratey components rather than product features. 92
Fiure 8: Completed House of Maretin Quality Example BIBLIOGRAPHY 1. R. D. Buzzell, Maretin Productivity, PhD Dissertation Ohio State, 1957. 2. J. Dean, Maretin Productivity and Profitability, Productivity Measurement Review, Number 20, February 1960, pp. 47 ff. 3. J. R. Hauser and D. Clausin, The House of Quality, Harvard Business Review, May-June 1988, pp. 63 ff. 4. H. Hereth, Taret Costin in the Textile Complex, Journal of Textile and Apparel, Technoloy and Manaement, Volume 2, Issue 4, Fall 2002. 5. H. Hereth, Launchin Products towards the Riht Taret, Journal of the Textile Institute, Vol. 95, Numbers 1-6, 2004, pp. 251 259. 6. C. H. Sevin, Maretin Productivity Analysis, McGraw Hill, 1965. 7. Min Xie, Kay-Chuan Tan, Thon Nee Goh, Advanced QFD Applications, Milwauee, Wis.: American Society for Quality, Quality Press, 2003. 93
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