CHAPTER 1

INTRODUCTION AND LITERATURE REVIEW [1]

In today’s global and highly competitive market, it is essential for the survival of
any firm involved in the service industry to be adaptive, responsive to changes, proactive
and has the capability to deliver high quality products according to diverse customer
requirements. Therefore, it is very important for any firms which involved in service
industry to improve their service quality by reducing the gap between internal quality and
external customer satisfaction (Lin 2007). The main objectives of this study are to
measure the service quality performance and identify critical service quality
characteristics as perceived by the firm’s customers. QFD is a customer driven planning
process to guide the design, manufacturing, and marketing of goods. In this study, QFD
will be used as a tool to improve quality in service industry. By implementing QFD, it
will help the firms involved to have clearer picture of quality requirements that could
improve their customers’ satisfaction. QFD is a powerful technique in determining
customers’ requirements and integrate them into the product or service provided by
system integrator firm. QFD technique is not only applicable in manufacturing industry,
but it could be implemented in various industries to meet or exceed customer
expectations. By using QFD technique, service quality characteristics and performance of
the studied firm can be determined.

QFD is one of the TQM quantitative tools and techniques that could be used to
translate customer requirements and specifications into appropriate technical or service
requirement. This is important in order to deliver product or service that fulfils or exceeds
customer requirements. According to Guinta and Praizler (1993), QFD is a customer
driven tool. While Chan and Wu (2002), stated that QFD is a customer driven planning
process to guide the design, manufacturing, and marketing of goods. QFD uses visual
planning matrices that link customer requirements, design requirements, target values and
competitive performance into one chart (Pun et al. 2000). QFD was first put into use at
Mitsubishi’s Kobe shipyard site in 1972, and later in 1983 it was introduced into the USA
(Akao 1990). Since then, it has been used as a product development and quality
improvement tool around the world (Akao 1990).

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 In 1966, Dr. Yoji Akao had introduced the QFD concept in Japan (Dean 1998).
Professor Mizuno first used QFD in 1972 to Mitsubishi’s Kobe shipyard site to design
super tankers (Martins and Aspinwall 2001). According to Cohen (1995) the two pioneer
researchers that had developed the QFD were Mizuno and Akao. In the late 1970s,
Toyota the automobile manufacturer had adopted QFD and further developed the QFD
concept to a detailed process (Cohen, 1995). According to Sullivan (1986) Toyota Auto
body had started using QFD in 1977, and as a result, Toyota introduced four new van-
type vehicles between 1977 and 1984. Toyota experienced a 20% reduction in the startup
cost due to QFD technique adoption in launching its new products from 1977 till 1979
(Chan and Wu 2002).

In 1986, Ford Motor Company and Xerox were the early users of QFD that
initiated the use of QFD concept in the USA (Chan and Wu 2002). Since then, QFD has
been developed and broadly used in various industries such as automotive, electronics,
banking, insurance, healthcare, utilities, food processing, aerospace, software
engineering, construction and marketing (Chan and Wu 2003). Many other multinational
companies such as IBM, HP, General Motors, AT&T, Digital Equipment, ITT,

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CHAPTER 2

QFD AND ITS NEED

2.1 WHAT IS QFD? [2]

Quality Function Deployment (QFD) was developed to bring this personal
interface to modern manufacturing and business. In today's industrial society, where the
growing distance between producers and users is a concern, QFD links the needs of the
customer (end user) with design, development, engineering, manufacturing, and service
functions.

QFD can be thus understood as:

• Understanding Customer Requirements

• Quality Systems Thinking + Psychology + Knowledge/Epistemology

• Maximizing Positive Quality That Adds Value

• Comprehensive Quality System for Customer Satisfaction

• Strategy to Stay Ahead of The Game

As a quality system that implements elements of Systems Thinking with elements of

Psychology and Epistemology (knowledge), QFD provides a system of comprehensive
development process for:

• Understanding 'true' customer needs from the customer's perspective

• What 'value' means to the customer, from the customer's perspective

• Understanding how customers or end users become interested, choose, and are
satisfied

• Analysing how do we know the needs of the customer

• Deciding what features to include

• Determining what level of performance to deliver

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 • Intelligently linking the needs of the customer with design, development,
engineering, manufacturing, and service functions

• Intelligently linking Design for Six Sigma (DFSS) with the front end Voice of
Customer analysis and the entire design system

QFD is a comprehensive quality system that systematically links the needs of the
customer with various business functions and organizational processes, such as
marketing, design, quality, production, manufacturing, sales, etc., aligning the entire
company toward achieving a common goal.

It does so by seeking both spoken and unspoken needs, identifying positive

quality and business opportunities, and translating these into actions and designs by using
transparent analytic and prioritization methods, empowering organizations to exceed
normal expectations and provide a level of unanticipated excitement that generates value.

The QFD methodology can be used for both tangible products and non-tangible
services, including manufactured goods, service industry, software products, IT projects,
business process development, government, healthcare, environmental initiatives, and
many other applications.

2.2 NEED OF QFD [3]

Quality Function Deployment (QFD) has been known in the western world for the
last twenty years, and, over that time, it has developed a chickened reputation. Companies
that have spent the effort to really understand and apply it have achieved excellent results
with it. Many other companies have merely dabbled with it or perhaps concluded that it is
a series of complex matrices that take a lot of time with little to show for it.

One of the common issues with this latter group of companies is that they have
not understood what QFD really is or what it can do for them. If one explores the
common issues companies face with new product development, one can better understand
how QFD can fit into the development process to address these issues.

Issue 1: Current and future customer needs are not adequately understood.
Innovation-based companies may focus on pushing a technology into the marketplace
without truly understanding customer needs. Companies with existing products, assume
they understand their customer needs. Or needs may rapidly evolve, but the company

4
doesn't recognize this situation. Marketing may understand the needs, but this knowledge
is not passed on to the development team.

QFD Solution: Voice of the customer (VOC) - the effort to investigate and
analyse customer needs is a prerequisite for a QFD effort. With QFD, VOC data is
reduced into a set of critical customer needs using techniques such as affinity diagrams,
function’s analysis, etc., defined and documented in customer needs data dictionary, and
prioritized. This VOC effort is also the opportunity to recognized unfulfilled needs that
can provide, at a minimum, competitive advantage, and, potentially, a break-through
product or true value innovation. A basic principle of QFD and any other system is
"garbage in, garbage out". If adequate effort is not spent in understanding customer needs,
the result of QFD, as well as the entire development effort, will be a less than optimum
product.

Issue 2: The competitive situation is not understood nor adequately

considered. Marketing may understand the competition, but this knowledge is not
transferred to the team. No formal data collection or analysis is performed. This can lead
to non-competitive or me-too products or products that rapidly lose their competitive
advantage.

QFD Solution: Once customer needs are defined, the second major step with
QFD is to perform competitive analysis. This includes not only analysing current
competitive strengths and weaknesses, but also considering future directions of
competitors. It also involves mapping competitor's positions against market and
demographic characteristics and against key product characteristics to recognize threats
and opportunities. This analysis is a key part of planning the new product.

Issue 3: Inadequate attention is paid to developing a product strategy and

value proposition. There may be an implicit strategy understood by management,
Marketing, or some team members, but not all team members understand this strategy,
leading to suboptimal decisions. In the absence of competitive analysis and strategy, the
team may want to exceed competitive product's performance parameters in all areas,
leading to a more costly product or a risky development project. The product may be
aimed at the wrong market niche or miss the opportunity that exists.

5
 QFD Solution: A third step in the QFD process is to develop the product strategy
and value proposition. The objective is to get the "most bang for the buck" out of the
development effort. This strategy needs to be explicitly defined, understood and agreed to
by all participants. The strategy should reflect where the team will focus its development
effort to achieve the customer value proposition (e.g. improvement goals, etc.). Use of
related tools such as conjoint analysis can also help to validate the value of certain
capabilities to the customer.

Issue 4: Product requirements and specifications are not carefully balanced

against needs and implications. Marketing wants it all when they create a marketing
requirements document. Specification target values can be arbitrarily established to
exceed the competition without regard to cost or the value proposition. Inadequate
consideration may be given to trade-offs among product parameters leading to additional
cost and development effort. A requirement may be established because the developer
thinks it would be a good idea.

QFD Solution: Requirements (technical characteristics) are only established in

response to customer needs (stated or unstated but recognized). Technical benchmarking
is performed to help understand the competitive position and establish appropriate
specifications (target values). Trade-offs and cost drivers are analyzed in the interaction
matrix. Risk and difficulty is considered in establishing specifications (target values). In
short, there is a rigorous consideration of a variety of factors in objectively developing
requirements and specifications.

Issue 5: Insufficient attention is given to developing collaboration and

teamwork. Team members are assigned and thrown together in an Investigation or
Feasibility stage, but frequently little explicit effort is given to develop collaboration and
teamwork.

QFD Solution: QFD is a planning and decision-making methodology that is

performed by the product team. It forces early communication, planning and decision-
making among team members. It requires open sharing of information, overcoming the
hidden knowledge that can otherwise plague a team. It bridges the gap between
Marketing, Engineering, Manufacturing and Quality. Team member's knowledge is
"levelled" through this process. The initial product planning with QFD leads to rapidly
developing collaboration, teamwork, and commitment to the product strategy and plan.

6
 Issue 6: In the rush to develop a new product, inadequate attention is given to
developing and evaluating concept alternatives. Traditional architectures, technologies,
and concepts are assumed as the basis for the new product because time is short.

QFD Solution: QFD is oriented toward defining requirements (technical

characteristics in a global manner - independent of a particular technical solution so that
multiple concept alternatives can be considered and the best one selected. After the
product planning matrix is completed, the QFD process includes a concept development
and evaluation step with an emphasis on developing alternatives. The intent is to identify
a more optimal, and perhaps even a break-through solution rather than continuing with
the traditional concept used for past products. QFD provides a concept selection matrix
using the requirements as a basis for decision criteria. QFD places an emphasis on
innovation and providing innovative and exciting capabilities to customers

Issue 7: Critical characteristics, process requirements and quality controls

are not effectively linked. Frequently, designs are tossed over the wall to Manufacturing
and Quality. They interpret drawings and define manufacturing processes and quality
requirements without necessarily understanding the critical product and part parameters
or critical processes. The result is that process and quality controls may not focus on the
most important issues.

QFD Solution: QFD is a flow down process with the deployment matrix, process
planning matrix and process/quality control matrix. These subsequent QFD phases insure
on-going communication, planning and decision-making among team members and
between the Engineering, Manufacturing and Quality functions and with suppliers.
Critical characteristics, process requirements and quality requirements are explicitly
identified, planned and communicated. This assures alignment and commitment
throughout the process and avoids some of the last minute quality problems that occur
during launch.

When one considers the time required to address these issues (or the risks and sub-
optimization if not addressed), QFD can not only save time and effort, but substantially
reduce development risk and increase market acceptance and competitiveness. QFD,
when performed with full understanding of the process and with adequate effort to collect
and analyse the required data, is a powerful tool that addresses the shortcomings that are
common in product development.

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CHAPTER 3

CUSTOMER FOCUSED DEVELOPMENT WITH QFD [4]

Quality Function Deployment (QFD) is a structured approach to defining

customer needs or requirements and translating them into specific plans to produce
products to meet those needs. The "voice of the customer" is the term to describe these
stated and unstated customer needs or requirements. The voice of the customer is
captured in a variety of ways: direct discussion or interviews, surveys, focus groups,
customer specifications, observation, warranty data, field reports, etc. This understanding
of the customer needs is then summarized in a product planning matrix or "house of
quality". These matrices are used to translate higher level "what's" or needs into lower
level "how's" - product requirements or technical characteristics to satisfy these needs.

While the Quality Function Deployment matrices are a good communication tool
at each step in the process, the matrices are the means and not the end. The real value is in
the process of communicating and decision-making with QFD. QFD is oriented toward
involving a team of people representing the various functional departments that have
involvement in product development: Marketing, Design Engineering, Quality Assurance,
Manufacturing/ Manufacturing Engineering, Test Engineering, Finance, Product Support,
etc.

The active involvement of these departments can lead to balanced consideration of

the requirements or "what's" at each stage of this translation process and provide a
mechanism to communicate hidden knowledge - knowledge that is known by one
individual or department but may not otherwise be communicated through the
organization. The structure of this methodology helps development personnel understand
essential requirements, internal capabilities, and constraints and design the product so that
everything is in place to achieve the desired outcome - a satisfied customer. Quality
Function Deployment helps development personnel maintain a correct focus on true

8
requirements and minimizes misinterpreting customer needs. As a result, QFD is an
effective communications and a quality planning tool.

3.1 CAPTURING THE VOICE OF THE CUSTOMER

The process of capturing the voice of the customer is described in the papers on
Product Definition and Steps for Performing QFD. It is important to remember that there
is no one monolithic voice of the customer. Customer voices are diverse. In consumer
markets, there are a variety of different needs. Even within one buying unit, there are
multiple customer voices (e.g., children versus parents). This applies to industrial and
government markets as well. There are even multiple customer voices within a single
organization: the voice of the procuring organization, the voice of the user, and the voice
of the supporting or maintenance organization. These diverse voices must be considered,
reconciled and balanced to develop a truly successful product. One technique to
accomplish this is to use multiple columns for different priority ratings associated with
each customer voice in the product planning matrix.

Quality Function Deployment requires that the basic customer needs are
identified. Frequently, customers will try to express their needs in terms of "how" the
need can be satisfied and not in terms of "what" the need is. This limits consideration of
development alternatives. Development and marketing personnel should ask "why" until
they truly understand what the root need is. Breaking down general requirements into
more specific requirements by probing what is needed.

Once customer needs are gathered, they then have to be organized. The mass of
interview notes, requirements documents, market research, and customer data needs to be
distilled into a handful of statements that express key customer needs. Affinity
diagramming is a useful tool to assist with this effort. Brief statements which capture key
customer requirements are transcribed onto cards. A data dictionary which describes these
statements of need is prepared to avoid any misinterpretation. These cards are organized
into logical groupings or related needs. This will make it easier to identify any
redundancy and serves as a basis for organizing the customer needs for the first QFD
matrix.

9
 In addition to "stated" or "spoken" customer needs, "unstated" or "unspoken"
needs or opportunities should be identified. Needs that are assumed by customers and,
therefore not verbalized, can be identified through preparation of a function tree. These
needs normally are not included in the QFD matrix, unless it is important to maintain
focus on one or more of these needs.

3.2 QFD METHODOLOGY FLOW

The basic Quality Function Deployment methodology involves four basic phases
that occur over the course of the product development process. During each phase one or
more matrices are prepared to help plan and communicate critical product and process
planning and design information. This QFD methodology flow is represented in figure
3.2.1

Figure 3.2.1 QFD Methodology Flow

3.3 PRODUCT PLANNING USING QFD

Once customer needs are identified, preparation of the product planning matrix or
"house of quality" can begin. The sequence of preparing the product planning matrix is as
follows:

1. Customer needs or requirements are stated on the left side of the matrix as shown
in figure 3.3.1. These are organized by category based on the affinity diagrams.
Insure the customer needs or requirements reflect the desired market segment(s).
Address the unspoken needs (assumed and excitement capabilities). If the number

10
 of needs or requirements exceeds twenty to thirty items, decompose the matrix
into smaller modules or subsystems to reduce the number of requirements in a
matrix. For each need or requirement, state the customer priorities using a 1 to 5
rating. Use ranking techniques and paired comparisons to develop priorities.

Figure 3.3.1 Product Planning Matrix

2. Evaluate prior generation products against competitive products. Use surveys,

customer meetings or focus groups/clinics to obtain feedback. Include
competitor's customers to get a balanced perspective. Identify price points and
market segments for products under evaluation. Identify warranty, service,
reliability, and customer complaint problems to identify areas of improvement.
Based on this, develop a product strategy. Consider the current strengths and
weaknesses relative to the competition? How do these strengths and weaknesses
compare to the customer priorities? Where does the gap need to be closed and
how can this be done - copying the competition or using a new approach or
technology? Identify opportunities for breakthrough's to exceed competitor's
capabilities, areas for improvement to equal competitor’s capabilities, and areas
where no improvement will be made. This strategy is important to focus
development efforts where they will have the greatest payoff.

3. Establish product requirements or technical characteristics to respond to customer

requirements and organize into related categories. Characteristics should be

11
 meaningful, measurable, and global. Characteristics should be stated in a way to
avoid implying a particular technical solution so as not to constrain designers.

4. Develop relationships between customer requirements and product requirements

or technical characteristics. Use symbols for strong, medium and weak
relationships. Be sparing with the strong relationship symbol. Have all customer
needs or requirement been addressed? Are there product requirements or technical
characteristics stated that don't relate to customer needs?

5. Develop a technical evaluation of prior generation products and competitive

products. Get access to competitive products to perform product or technical
benchmarking. 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 and consider this data in the technical evaluation.

6. Develop preliminary target values for product requirements or technical

characteristics.

7. 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 "the critical few" product requirements or technical
characteristics. Focus on negative interactions - consider product concepts or
technology to overcome these potential trade-offs or consider the trade-offs in
establishing target values.

8. Calculate importance ratings. Assign a weighting factor to relationship symbols

(9-3-1, 4-2-1, or 5-3-1). Multiply the customer importance rating by the weighting
factor in each box of the matrix and add the resulting products in each column.

9. Develop 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 technical qualifications, business risk, manufacturing
capability, supplier/subcontractor capability, cost, and schedule. Avoid too many
difficult/high risk items as this will likely delay development and exceed budgets.

12
 Assess whether the difficult items can be accomplished within the project budget
and schedule.

10. Analyse the matrix and finalize the product development strategy and product
plans. Determine required actions and areas of focus. Finalize target values. Are
target values properly set to reflect appropriate trade-offs? Do target values need
to be adjusted considering the difficulty rating? Are they realistic with respect to
the price points, available technology, and the difficulty rating? Are they
reasonable with respect to the importance ratings? Determine items for further
QFD deployment. To maintain focus on "the critical few", less significant items
may be ignored with the subsequent QFD matrices. Maintain the product planning
matrix as customer requirements or conditions change.

One of the guidelines for successful QFD matrices is to keep the amount of
information in each matrix at a manageable level. With a more complex product, if one
hundred potential needs or requirements were identified, and these were translated into an
equal or even greater number of product requirements or technical characteristics, there
would be more than 10,000 potential relationships to plan and manage. This becomes an
impossible number to comprehend and manage.

To summarize the initial process, a product plan is developed based on initial

market research or requirements definition. If necessary, feasibility studies or research
and development are undertaken to determine the feasibility of the product concept.
Product requirements or technical characteristics are defined through the matrix, a
business justification is prepared and approved, and product design then commences.

3.4 CONCEPT SELECTION AND PRODUCT DESIGN

Once product planning is complete, a more complete specification may be
prepared. The product requirements or technical characteristics and the product
specification serve as the basis for developing product concepts. Product benchmarking,
brainstorming, and research and development are sources for new product concepts. Once
concepts are developed, they are analysed and evaluated. Cost studies and trade studies
are performed. The concept selection matrix can be used to help with this evaluation
process.

13
 The concept selection matrix shown in figure 3.4.1, lists the product requirements
or technical characteristics down the left side of the matrix.

Figure 3.4.1 Concept Selection Matrix

These serve as evaluation criteria. The importance rating and target values (not
shown) are also carried forward and normalized from the product planning matrix.
Product concepts are listed across the top. The various product concepts are evaluated on
how well they satisfy each criterion in the left column using the QFD symbols for strong,
moderate or weak. If the product concept does not satisfy the criteria, the column is left
blank. The symbol weights (5-3-1) are multiplied by the importance rating for each
criterion. These weighted factors are then added for each column. The preferred concept
will have the highest total. This concept selection technique is also a design synthesis
technique. For each blank or weak symbol in the preferred concept's column, other
concept approaches with strong or moderate symbols for that criterion are reviewed to see
if a new approach can be synthesized by borrowing part of another concept approach to
improve on the preferred approach.

Based on this and other evaluation steps, a product concept is selected. The
product concept is represented with block diagrams or a design layout. Critical
subsystems, modules or parts are identified from the layout. Criticality is determined in
terms of effect on performance, reliability, and quality. Techniques such as fault tree
analysis or failure modes and effects analysis (FMEA) can be used to determine criticality
from a reliability or quality perspective.

14
 The subsystem, assembly, or part deployment matrix is then prepared. The process
leading up to the preparation of the deployment matrix is depicted in fig. 3.4.2

Figure 3.4.2 Process Leading Deployment Matrix

The product requirements or technical characteristics defined in the product

planning matrix become the "what's" that are listed down the left side of the deployment
matrix along with priorities (based on the product planning matrix importance ratings)
and target values. The deployment matrix is prepared in a manner very similar to the
product planning matrix. These product requirements or technical characteristics are
translated into critical subsystem, assembly or part characteristics. This translation
considers criticality of the subsystem, assembly or parts as well as their characteristics
from a performance perspective to complement consideration of criticality from a quality
and reliability perspective. Relationships are established between product requirements or
technical characteristics and the critical subsystem, assembly or part characteristics.
Importance ratings are calculated and target values for each critical subsystem, assembly
or part characteristic are established. An example of a part/assembly deployment matrix is
shown in figure 3.4.3.

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 Figure 3.4.3 Part/Assembly Deployment Matrix

3.5 PROCESS DESIGN

Quality Function Deployment continues this translation and planning into the
process design phase. A concept selection matrix can be used to evaluate different
manufacturing process approaches and select the preferred approach. Based on this, the
process planning matrix shown in figure 3.5.1 is prepared.

Figure 3.5.1 Process Planning Matrix

Again, the "how's" from the higher level matrix (in this case the critical
subsystem, assembly or part characteristics) become the "what's" which are used to plan
the process for fabricating and assembling the product. Important processes and tooling
requirements can be identified to focus efforts to control, improve and upgrade processes
and equipment. At this stage, communication between Engineering and Manufacturing is

16
emphasized and trade-offs can be made as appropriate to achieve mutual goals based on
the customer needs.

Figure 3.5.2 Process/Quality Control Matrix

In addition to planning manufacturing processes, more detailed planning related to

process control, quality control, set-up, equipment maintenance and testing can be
supported by additional matrices. The figure 3.5.2 provides an example of a
process/quality control matrix.

The process steps developed in the process planning matrix are used as the basis
for planning and defining specific process and quality control steps in this matrix.

The result of this planning and decision-making is that Manufacturing focuses on

the critical processes, dimensions and characteristics that will have a significant effect on
producing a product that meets customer’s needs. Disagreements over what is important
at each stage of the development process should be minimized, and there will be greater
focus on "the critical few" items that affect the success of the product.

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CHAPTER 4

QFD METHODOLOGY [5], [6]

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.

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

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 QFD process described below is supported by the Product Development

Toolkit of DRM Associates, which includes QFD software.

4.1 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. During customer meetings or focus groups, ask
"why" to understand needs and determine root 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.

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.

19
 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.

4.2 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.

5. 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 going from a rating of "2" to "4" would result in an improvement
factor of "1.2". Identify warranty, 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

20
 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. 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 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.

10. Perform a technical evaluation of current products and competitive products.

Sources of information include: competitor websites, industry publications,
customer interviews, published specifications, catalogues and brochures, trade
shows, purchasing and benchmarking competitor’s products, patent information,

21
 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-offs in establishing target values.

13. Calculate important 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.

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 technical qualifications, resource availability, technical risk,
manufacturing capability, supply chain capability, and schedule. Develop a
composite rating or breakdown into individual assessments by category.

15. Analyse 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.

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

4.3 CONCEPT DEVELOPMENT

22
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 evaluate 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, support
and testability requirements, test schedule and resources, technical and business
risk, supply chain capability.

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. 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

23
 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?

4.4 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. 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 are 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 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 assemblies or parts 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. Determine the Priority for any needs that were added.

24
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 subassemblies, 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 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.

25
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. Analyse 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.

26
CHAPTER 5

QFD & TARGET COSTING CASE STUDY [7]

DRM Associates provides new product development (NPD) consulting. It
sponsors the Product Development Forum, a source of information, resources and links
on NPD. Its clients frequently have complex products and development processes typified
by the aerospace, automotive, capital equipment, consumer products, defence, electronics,
high technology and medical equipment industries.

5.1 BACKGROUND
The company was under contractual obligation to deliver a quick release top
nozzle (QRTN) to several customers. This is a complex subassembly costing
approximately $1,700 each for a major piece of capital equipment. The current product, a
removable top nozzle (RTN), is needed in case a product has to be repaired because of a
failure. While this repair is a low probability occurrence, the cost of downtime is very
high. If the product can't be repaired within a reasonable period, there are significant
operational costs involved.

The current RTN allowed repair within a reasonable time if all things went
according to plan. However, there was considerable time and cost involved in mobilizing
equipment to support the repair, in setting up the equipment to support the repair,
removing and replacing the top nozzle, and tearing down and demobilizing the repair
equipment. There were additional problems as follows:

• The nozzle did not always come free from the product as intended and an
additional heavy tool was needed to supply the force to lift the nozzle off.

• Removal process involved taking out a locking tube, which resulted in a loose
part. There was concern that this part could drop during the removal or
replacement operation, taking additional time. Competitive designs did not have
loose parts.

27
 • The removal and replacement process was not sufficiently reliable. There was one
occurrence when a locking tube was jammed into another locking tube, preventing
the assembly from being used.

In order to meet contractual requirements as well as develop a more competitive

design for other potential customers, a project was initiated to develop a QRTN. A
previous QRTN project was cancelled late in the Detailed Design Phase after the
estimated cost increased to a level significantly above the RTN cost (+80%). Additional
contractual commitments caused the company to restart the project after several years. A
multi-functional core team was created, and a decision was made to use the newly-
developed NPD process, target costing, value analysis, and quality function deployment
(QFD) to help the team accomplish its objectives. In preparation for this program, hands-
on QFD, target costing and value analysis training was provided to team members,
several key functional managers, and other potential users of these tools. In addition, a
QFD consultant was engaged to help the team apply these tools.

5.2 VOICE OF THE CUSTOMER

QFD logically begins with understanding customer needs and using these needs to
drive the development process. These customer needs are referred to as "voice of the
customer" (VOC). Instead of solely relying on the marketing organization to define these
needs, team members met with customers to gain a first-hand understanding of their
needs. It was recognized that there were multiple customer voices to consider with this
project:

• Voice of the Customer: This is the obvious customer. They need to be satisfied
that the QRTN works reliably as intended, both in operation as well as during
repair. They also need to be assured that the repair can be done expeditiously,
while on the critical path. Understanding this VOC involved a review of contract
requirements, discussions with marketing personnel responsible for the accounts
that had contractual commitments for the QRTN, and discussions with the
customer's engineering personnel. Invitations were issued to two customers to
have their personnel participate on the core team, but the customers declined
because of the time commitment involved. They did ask to be regularly briefed on
the progress.

28
 • Voice of Services Division: The actual reconstitution work was done by the
Services Division, a sister division. As a result, they had important insights into
the needs to support the actual removal and reinstallation of the top nozzle. A
Services Division individual involved in this work was assigned to the core team
to provide this insight and support the development process.

• Voice of the Engineer: There are specific regulatory and interface requirements
with existing products that must be addressed and considered. Team members
familiar with these requirements provided this customer voice.

Prior to meeting with customers, the team obtained a briefing on the prior QRTN
effort to familiarize them with some of the issues. Meetings were scheduled with
engineering personnel at the customers that had a contractual requirement for the QRTN.
The initial meetings were intended to probe and primarily listen for the customer needs. A
list of questions to ask and a meeting agenda were prepared to guide these interviews. The
teams were briefed on asking "Why" to understand the fundamental customer needs.
Several team members were involved in each of these interviews, and they typically
talked with multiple people in each customer organization. Interview notes were
summarized and distributed to all team members. In addition, these meetings were
discussed in detail in subsequent team meetings to assure a complete understanding of
each customer's perspectives. Contractual requirements were reviewed. A teleconference
with the marketing representatives for the customers was held to gain their perspective.

The customer visits also provided good insight into the design of two of the
competitor's products and an in-house design from one of the customers. This proved to
be a good opportunity to gather competitive assessment information and provided the
information to develop rapid prototyping models and/or sketches of competitive joints.

To gain a better understanding of the voice of Services Division, the team watched
a video of the repair process to gain a first-hand understanding of the issues in top nozzle
removal and installation. Data was also assembled (Table 5.2.1) detailing the time
requirements for Services Division to perform its job with the RTN and estimates or goals
with the QRTN.

The team met to compile all of the requirements. Brief natural language
expressions of customer needs (e.g., "maintain locked joint") were written on "post-its"

29
and placed on the wall. Some questions were asked to clarify meanings and to determine
"Why". The team used Affinity Diagramming to organize related statements into logical
clusters. Besides organizing the customer needs, this also facilitated the following:

• Some redundancy in statements of need was observed and eliminated

• A pattern was observed of some very detailed, lower-level needs mixed

with higher-level needs. This led to an attempt to "level" needs by asking "Why" and
leading to consolidation with higher level needs.

• Related needs were discussed to understand the need. This led to the
development of a data dictionary.

Table 5.2.1 - Repair Time Analysis

Current RTN Design QRTN Design Estimates

(3 people required) (2 people required)
Activity Hours Hours

Equipment Setup 10 2

Repair 10 3

Inspection 1 1

Top Nozzle Removal 2 0.5

Top Nozzle Installation 3 0.5

Post Repair Equipment Tear Down 15 2

Total 41 9

Table 5.2.1 Repair Time Analysis

Initially, there were thirty-three statements of customer needs. By organizing these

requirements with affinity diagramming, examining each of these requirements, and
asking "why" to understand the fundamental need, this list was consolidated into twelve
customer needs. Table 5.2.2 shows examples of this consolidation process.

30
 Table 5.2.2 – Refining Customer Needs
Consolidated
Original
Customer Comment
Customer Needs
Need
Thimble rotation
resistance
Precludes
Joint reliability By asking “Why”, consolidated customer needs
skeleton damage
during repair back to the basic need.
No loose parts
during joint
operation
Simplified Consolidated requirements because simple tooling
tooling generally would lead to lower cost and cost was not
Low cost tooling deemed as important a customer need. Couldn’t
Minimize tool Simple tooling directly control mobilization with the design, but
mobilization concluded that simple tooling would achieve this
Minimal removal same objective. Minimal removal force also related
force back to simple tooling.
Fast nozzle
removal/install
Repair on critical
path
No loose parts
By asking “Why”, consolidated customer needs
during joint
Fast repair back to the basic need. Many of these lower-level
operation
needs then became technical characteristics.
Minimum
number of joints
Maintain
alignment during
repair

Table 5.2.2 Refining Customer Needs

5.3 PRODUCT PLANNING MATRIX

31
 Once these customer needs were identified, they were organized into a product
planning matrix. Based on the initial customer meetings, priorities were assigned to each
requirement using a 1 to 5 scale. The information gained on competitive products as well
as prior internal competitive assessments was used to look at competing joint designs
from a customer perspective and develop an initial Competitive Evaluation. Actual
hardware, rapid prototyping models, and sketches were used to support this evaluation.
The Competitive Evaluation was done for six joint designs: the current RTN design, the
previous QRTN design, a joint company/customer design, a customer design and two
competitor's designs. This information was reviewed with customers. They were satisfied
with the stated customer needs in the matrix. They provided feedback to make minor
changes to priorities and the competitive assessment.

The customer needs, priorities and competitive assessment were reviewed and a
product plan was developed. The next step was to develop technical characteristics of the
products to respond to customer needs. This was one of the most difficult steps for team
members and required a good deal of facilitation and thought. The criteria for the
technical characteristics were:

• Global - must not imply or constrain design alternatives to any one technical
solution or approach

• Meaningful - must be subsequently actionable to drive the design process; they

can't be abstract

• Measurable - must be able to define a target value and clearly determine whether
the characteristic has been achieved or not

Examples of the technical characteristics defined in order to satisfy customer

needs are shown in Table 5.3.1

As each technical characteristic was defined, the goal for that characteristic was
also established, maximize, minimize, or equal to the target. Next, the relationship to each
customer need was established. The relationship defines the degree (strong - weight of 5,
medium - weight of 3, or weak - weight of 1) that the technical characteristic satisfies the
customer need. It does not define the potential interaction of the characteristic with the

Table 5.3.1 – Technical Characteristics to Satisfy Customer Needs

32
 Customer Technical
Discussion
Need Characteristics
The removal and installation process is done under
conditions where the joint can’t be directly seen, but
is observed via video. It is required to visually verify
the joint is locked upon reinstallation. This is
videotaped. The nozzle develops a black coating in
Visually
Joint verification operation making visual verification difficult. It was
verify
time observed that the contrast of new parts and having
locked joint
part features that protrude above the surface help
with verification. However, stating these as
technical characteristics was not global. Therefore
joint verification time was determined to be the most
appropriate technical characteristic.
No loose parts
A variety of factors support the customer need for
during operation
fast repair. Loose parts contribute to additional
Operator lifting
handling time and potential time if part is dropped.
force
If lifting force is greater than what a person can lift,
Joint lock
additional equipment and set-up time are required.
verification time
The two time-related criteria are straight-forward
Maximum removal
Fast repair goals. If protrusions exist above adapter plate,
installation time
additional time is required to lift tool over protrusion
Protrusion above
to properly seat the tool. The greater the OD collet
adapter plate
to insert clearance, the easier it will be to access and
OD collet to insert
pull parts of the product that require replacement.
clearance
Moveable tooling parts may contribute to additional
No moveable
operation time.
tooling parts
The customer need relates to the QRTN joint
Minimum joint remaining locked during operation and a concern
activation that small, fine-featured parts may corrode and be
Joint force/torque broken during operation. The first related technical
reliability Use of approved characteristics establishes a minimum force required
during material to unlock joint to avoid the joint coming unlocked
operation In-operation loose due to dynamic forces during operation. The next
parts simulation/ two characteristics relate to use of materials and
analysis simulation to assure that parts do not corrode or
break during operation.

Table 5.3.1 Technical Characteristics to Satisfy Customers Needs

customer need. The team often stumbled in this regard; they wanted to define negative
interactions between the customer need and the technical characteristic. For example, a

33
number of technical characteristics were seen as having a negative impact on "Minimum
price increase" causing the team to want to establish a relationship. Frequent reminders
were made that this was not the purpose of this relationship. After the relationships were
established, the importance rating of each technical characteristic was calculated.

As technical characteristics were developed, preliminary target values were

defined to assure that there was a measurable characteristic. In a few cases, the difficulty
in defining a meaningful target value caused the team to redefine the technical
characteristic.

Table 5.3.2 – Strong Negative Interactions Examples

Opposing
Technical
Technical Comment
Characteristic
Characteristic
To minimize guide thimble mis-location from
Guide thimble true centre requires tighter tolerances that
Target cost mis-location from drive up cost. This potential conflict can
true centre addressed with tolerance analysis and careful
allocation and management of tolerances.
As the number of active joints is reduced, the
Guide thimble
stresses on all of these components increase.
stresses
After discussing this issue and considering the
Adapter plate
Inactive joints potential number of times that an assembly would
stresses
be reconstituted and joints overridden, it was
Joint component
decided to reduce the target value for inactive
stresses
joints from 4 to 2.
While the protrusion above the adapter plate
needs to be minimized to prevent interference
with other components in the customer’s system
and prevent impacting cooling flow, some
Protrusion above Joint lock
protruding features aid in verifying a locked joint
adapter plate verification time
and reducing the verification time if the
protruding features can be kept below the height
of this target value. This potential conflict can be
managed through team awareness of the issue.

Table 5.3.2 Strong Negative Interactions Examples

The next major step was to define interactions among the technical characteristics.
To keep the interactions manageable, the team ignored the minor interactions and even
the moderate positive interactions. The strong negative interactions ("N") were of

34
particular importance to manage. Examples of the strong negative interactions are shown
in Table 5.3.2

The product planning matrix was finished by establishing target values once the
interactions and importance of each technical characteristic was understood and
establishing an estimate of technical difficulty for each of these characteristics at the
target value. See the final QRTN product planning matrix.

The product planning matrix was used to identify areas for follow-up and
investigation. For approximately half of the technical characteristics, required follow-up
steps or areas of investigation were identified to finalize target values or assess
achievement of target values as concept alternatives were explored. Examples are shown
in Table 5.3.3.

Table 5.3.3 – Follow-up Actions

Technical Characteristic Target Value Planned Action

Minimum joint activation Establish minimum force / torque

32 in-oz / X lbs
force / torque requirements

Deflection limit under 4g Investigate basis of 0.025 in.

0.025 ins.
load specification

OD collet-to-insert Zero on nominal Review and optimize OD collet tool for

clearance stack-up max guide thimble clearances

Determine history of failed joints from

Inactive joints 2 joints
the Service Division’s history

Table 5.3.3 Follow-Up Actions

5.4 CONCEPT SELECTION

Once the technical characteristics of the QRTN were understood, product design
began. The first step was to develop concept alternatives. In order to meet target costs and
the defined technical characteristics, creative solutions were needed. This process began
with brainstorming. A brainstorming session was scheduled with not only the QRTN
team members, but approximately 6 other people that had experience with nozzles and
past QRTN efforts. The brainstorming session occurred over a six-hour period. It began
with briefing on the product planning matrix and the technical characteristics and design

35
issues that needed to be addressed. A function tree diagram was prepared to focus
people's attention on the functions that needed to be prepared rather than starting from the
point of existing design concepts.

The group was then divided into teams of three to four people to brainstorm and
then develop concept alternatives for the QRTN joint. Each team then presented their
concepts to the rest of the group and discussion ensued. The QRTN team then took those
concept alternatives and further reviewed and discussed them. The concept alternatives
were organized into six families and the most promising concept in each of these families
was further discussed and developed by a group of sub-team members.

The team used a concept selection matrix with the technical characteristics as
decision criteria to screen these concept alternatives and down-select to four alternatives.
An objective of the down-select was to yield two traditional alternatives and two more
radical alternatives to carry forward. One of the problems recognized was that the criteria
were not "levelled" and, therefore, insufficient weighting was given to target cost.
Adjustments to the weightings were needed to address this. Sub-teams then further
developed these four alternatives.

The concept selection matrix in conjunction with engineering analysis and

development of product cost estimates will be used to select two final design alternatives
which will be carried forward to the Preliminary Design Phase. One of the first steps in
this phase will be to prepare a deployment matrix to further define critical characteristics
of key components.

5.5 TARGET COST

In parallel with the effort to gather the voice of the customer, analysis was done to
develop a target cost. Marketing was asked how much customers would be willing to
spend to obtain a QRTN feature vs. the RTN feature. Marketing agreed that the QRTN
feature would be of interest to customers and that they should be willing to pay more for
it. However, it became apparent that this feature would more likely be offered to maintain
competitiveness at no additional cost or would be folded into overall pricing so that it was
not apparent what the price difference would be.

The company provides the product under warranty. When a product requires
repair, the company pays the Service Division to perform the repair. Any time savings in

36
performing the repair because of the QRTN would be reflected in lower warranty costs.
Data had been gathered in Table 1 showing the planned time savings that a QRTN design
would offer over an RTN design. The Service Division representative on the core team
provided data on the crew size and labour costs. Data was also collected on the number of
repairs performed over a several year period. This was used to determine frequency of
occurrence. Based on all of this data, the expected value of warranty savings with a
QTRN design was calculated. This was added to the RTN baseline cost to yield the target
cost established for this project. This calculation is shown below.

Target Cost = RTN Baseline Cost + Warranty Cost Savings

Warranty Cost Savings = Frequency of Repair Occurrence x QRTN Cost Savings

QRTN Cost Savings = Labour Rate x (RTN Man hours - QRTN Man hours) [See Table
5.2.1]

This target cost was included in the Product Planning Matrix as a target value.

Once the work was begun on concept development, the GA SEER DFM software
was used to support cost estimating. The model was validated by developing a model of
the existing RTN and comparing the model cost estimates with the current RTN costs. A
model of the previous QRTN design was also established to validate the model against
previous cost estimates. The team was unfamiliar with the cost model and did not
appreciate how it could be used to support the process. Meetings were held to discuss this
and the model expert was assigned to support the team. He met with the team to define a
preliminary parts list and a preliminary process definition (manufacturing process steps or
routings) for each alternative. The intent was to develop preliminary cost estimates to
support:

• Refinement of product and process design alternatives to reduce cost

• Comparison of concept alternatives for selection of the preferred concept(s)

The project was designated as high priority for the Division and established as a
"heavy-weight" program with a key functional manager designated as the project
manager. The initial staffing consisted of:

• Project Coordinator

37
 • Lead Designer

• Manufacturing Engineer

• Service Division Representative (part-time)

• Purchasing Representative (part-time)

Because of the challenges with achieving target cost, two additional

manufacturing engineers were assigned to support the team on a part-time basis. In
addition, since this was a pilot project, two additional members of the value engineering
team participated in the meetings to observe the process and support deploying the
process to future programs. One of those individuals was the lead designer on the past
QRTN program and became heavily involved with this program, providing briefings and
contributing to the discussions and analysis. It soon became apparent that additional
designers were going to be required to support the program and this individual along with
another part-time designer were formally added to the project team. The other member of
the value engineering team was also drafted. It is important to recognize the resource
intense commitment that is required to support a wide investigation of alternatives and
active manufacturing involvement in the early phase of a program.

This entire process took twenty weeks from the start of training to selection of the
final concept alternatives for development. The most time consuming activities were
collecting the voice of the customer in the beginning and the preliminary engineering
development of the concepts including the cost estimates.

5.6 RESULTS
The product is entering the final development and testing phases. Estimated costs
at this point are approximately 15% above the RTN cost and 5% above the cost target.
However, this is significantly less than the previous QRTN development where costs
were estimated at 80% over the RTN costs. As a result, this project is considered a major
success and a successful demonstration of QFD and target costing.

CHAPTER 6

CONCLUSION [4]

38
 In this paper we have discussed firstly about Quality Function Deployment and
mentioned its need with regards of various issues and discussing their solutions. Then we
have gone through that how Quality Function Development is a customer focussed
approach and even discussed about methodology of QFD. With the case study of one of
the renowned company, we have seen its extent of practical approach and emphasized our
discussion showing its importance in the industrial world. This all gives us a brief
conclusion as follows:

Quality Function Deployment, thus, begins with product planning; continues with
product design and process design; and finishes with process control, quality control,
testing, equipment maintenance, and training. As a result, this process requires multiple
functional disciplines to adequately address this range of activities. QFD is synergistic
with multi-function product development teams. It can provide a structured process for
these teams to begin communicating, making decisions and planning the product. It is a
useful methodology, along with product development teams, to support a concurrent
engineering or integrated product development approach.

Quality Function Deployment, by its very structure and planning approach,

requires that more time be spent up-front in the development process making sure that the
team determines, understands and agrees with what needs to be done before plunging into
design activities. As a result, less time will be spent downstream because of differences of
opinion over design issues or redesign because the product was not on target. It leads to
consensus decisions, greater commitment to the development effort, better coordination,
and reduced time over the course of the development effort.

QFD requires discipline. It is not necessarily easy to get started with. The
following is a list of recommendations to facilitate initially using QFD.

• Obtain management commitment to use QFD.

• Establish clear objectives and scope of QFD use. Avoid first using it on a large,
complex project if possible. Will it be used for the overall product or applied to a
subsystem, module, assembly or critical part? Will the complete QFD
methodology be used or will only the product planning matrix be completed?
• Establish multi-functional team. Get an adequate time commitment from team
members.

39
 • Obtain QFD training with practical hands-on exercises to learn the methodology
and use a facilitator to guide the initial efforts.
• Schedule regular meetings to maintain focus and avoid the crush of the
development schedule overshadowing effective planning and decision-making.
• Avoid gathering perfect data. Many times significant customer insights and data
exist within the organization, but they are in the form of hidden knowledge - not
communicated to people with the need for this information. On the other hand, it
may be necessary to spend additional time gathering the voice of the customer
before beginning QFD. Avoid technical arrogance and the belief that company
personnel know more than the customer.

Quality Function Deployment is an extremely useful methodology to facilitate

communication, planning, and decision-making within a product development team. It is
not a paperwork exercise or additional documentation that must be completed in order to
proceed to the next development milestone. It not only brings the new product closer to
the intended target, but reduces development cycle time and cost in the process.

REFERENCES

1. M. D. Baba, R. Norashikin, R. A. N. Mohd, I. R. Ahmad and S. H. Ahmed,

“Application of Quality Function Deployment to Study Critical Service

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 Quality Characteristics and Performance Measures”, European Journal of
Scientific Research, (33(3):398-410), 2009

2. www.qfdi.org/QFD BASICS/what_is_qfd.html

3. www.npd-solutions/whyqfd

4. www.npd-solutions.com/qfd

5. V. Dinesh, C. Rajesh and F. J. Wolter, “Analysing a Quality Function

Deployment (QFD) Matrix: An Expert System Based Approach to Identify
Inconsistencies and Opportunities”, Journal of the International Council on
Systems Engineering (INCOSE), (1(1):133-144), September 1994
6. www.npd-solutions/qfdsteps

7. www.npd-solutions/QFDcasestudy

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