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Session 4

– Recap of Lectures 2 and 3

• Begin Module 1

– Summary

• Module 6

– The Voice of the Customer

• Module 5

– Understanding Who is the Customer

• Module 4

– Customer Focus

• Module 3

– Systems

• Module 2

– Recap of Lectures 2 and 3

• Module 1

Session 4

Rajiv Gupta
BITS Pilani
August 2014
Lecture 4

MMZG 522 Total Quality



Systems Thinking
Understanding Variation
Theory of Learning

• End of module 1

Session 4

– Deming’s 14 Points

– Deming’s System of Profound Knowledge including

• In lecture 3 we discussed

Recap of Lecture 3

– The role of leadership in implementing Quality
– How the implementation of Quality goes through a
false start before realization sets in about the true
meaning of the process
– The attributes of leadership and how these contribute
to the successful implementation
– What is meant by vision, mission, values etc.
– The difference between vision and shared vision

• In lecture 2 we discussed

Recap of Lecture 2




A system cannot exist without a purpose. but also what it should not do as well – A component of a system cannot have a purpose independent of the system it is a part of • Purpose: Supplier Suppli Sup plier pli SIPOC Model .8 7 Tests of processes. Assembly. – The purpose of the system defines the relationships among the system components – The purpose not only defines what the system should accomplish. costs 9 Consumer feedback Suppliers of materials and equipment Receipt and test Consumers of materials Production. methods. methods and steps undertaken to achieve the system objective • Example: a Pizza parlor System – Systems and the SIPOC Model • Begin Module 2 Session 4 Input Process Output Customer 10 Purpose 12 – Meet (and exceed) the needs of the customer – Provide the features and quality characteristics – Achieving the capabilities to provide the above two purposes • Purpose 11 – A system has to have a purpose. Inspection Design and Redesign Stage 0 Generation of ideas THE DEMING FLOW DIAGRAM – Process: Making pizza dough – Method: Rolling it by hand or feed it through a machine – Step: Dusting the work surface with cornmeal before rolling out the dough • Systems consist of a number of interacting components that work together to achieve a common purpose • There are several processes. machines.

in “My Life and My Work” 18 Is business good or bad according to the dictates of fate? Must we accept the conditions as inevitable? Business is good or bad as we make it so. Who wins? • In grocery stores in the U. The dairy department takes a hit.. or for manufacturing. but to the end of making money – and this because we have evolved a system of money that instead of being a convenient medium of exchange. The only reason for growing crops. Examples of Non-Alignment and Alignment Functional objectives unaligned with system purpose 17 16 Henry Ford I. He is not dependent on us. He is not an interruption of our work. He is not an outsider of our business. manufacturing (and customer satisfaction) takes a beating. and instead we have operations carried on. There is no other possible reason. is that people may keep warm. is at times a barrier to exchange.” – Customer Focus • Begin Module 3 Session 4 . but the low milk and eggs prices brings customers into the store and the overall sales increase. We are not doing him a favour by serving him. have clothing to wear. The cheaper material causes more rejects in manufacturing.S. He is the purpose of it. yet that reason is forced into the background. He is doing us a favour by giving us the opportunity to do so.13 Component objectives aligned with system purpose • End of module 2 Session 4 15 14 • Company wishes to reduce cost and asks purchasing to find cheaper materials. We are dependent on him. eggs and milk are typically sold at a loss (or minimal profit). not to the end of service. for mining. So although purchasing achieves its goal. and articles to use. Mohandas Karamchand Gandhi 1890 “A customer is the most important visitor on our premises. He is part of it.

21 20 19 ?? Understand the customer needs and combine with our ability to develop and produce products to satisfy and delight the Customers. We know what is best for the customer. Product Out Approach 24 23 22 • We did not understand what the customer really wanted • We felt that the customer might be better served by what we provided • We are in the business of providing a certain product or service – not custom products or services • The customer did not know what he/she really needed • The customer needs changed Why the Mismatch . in “My Life and My Work” Instead of giving attention to competitors or to demand. our prices are based on an estimate of what the largest possible number of people will want to pay. or can pay.What we provided that the customer did not need What we provided What the customer needed AND we provided What the customer needed that we did not provide What the customer needed Inverted Organizational Pyramid Henry Ford I. for what we have to sell. Customer-In Approach Products and services designed to our reqts with features that satisfy us.

• When fuel injection systems were developed. Examples of Product Out Approach 25 • When a company is more focused on its capability and its product line. electronic.• End of module 3 Session 4 27 26 • Manufacturers of wristwatches run the risk of running out of business today as the advent of cell phones has made wristwatches redundant. the carburetor manufacturers did not have any business left • Had they understood that their business was providing fuel in an appropriate fashion to provide vehicle movement and acceleration. This way they could adapt to whatever form the document took. they would have adapted to the new technology Examples of Product Out Approach 28 – How the product is received by them – When it reaches them – In what packaging it reaches them • Internal customers are people who are at the receiving end of what we produce • They need to do further processing to the product or service • Internal customers have their requirements in terms of Internal Customers – Internal customers are the next person who receives our work – External customers who pays/uses the product or service 30 29 • It is not easy to define who the customer is • There are both internal and external customers Who is the Customer? – Understanding who is the customer • Begin Module 4 Session 4 . etc. it loses sight of the customer need it satisfies (or does not satisfy) • The manufacturers of carburetors in cars thought they were in the business of making carburetors. except as jewelry • Wristwatch manufacturers need to ask what specific customer need are they satisfying in order to stay in business • Xerox realized in the 1990s that paper copies might become obsolete • So they redefined their mission by saying they were a “Document Company” instead of a copier company.

• Children influence the decision for the purchase of breakfast cereals and other foods while the parents pay for them. If the part is packaged in a way that the line worker has to spend undue time to unpack the part before he can use it. if the stores sends parts to the line for processing or assembly then the line worker is an internal customer for the stores. Also. • Doctors prescribe the medicines that patients purchase. Companies that hire the students upon graduation influence the choice of college that students select.• Each of the above may be a different person • In addition there may be a number of intermediate customers in the customer chain – Those that pay for the product – Those that use the product – Those that influence the purchasing decision • External customers can be of different kinds External Customers – What do you need from me? – How do you prefer to receive it? – What do you do with it after you receive it from me? • Questions to ask internal customers Internal Customers 33 32 31 • For example. while maintaining the price that parents find acceptable. It would make more sense to send the part unpacked. Pharma companies target doctors in their marketing Other Examples of Multiple Customers Who is the customer? Manufacturer Of coffee maker Customer Chain . then it valuable time lost on the line. the packing material has to be removed from the line side area. perhaps in a bin where the line worker has to expend minimum time and effort to access the part. Marketers of breakfast food items target the children in their marketing campaign. Internal customers National Distributor Regional Distributor Retail Store Who drinks the coffee 34 Who makes the coffee Who purchases The coffeemaker • End of module 4 Session 4 36 35 • Parents pay for the college fees of the students but the students select the colleges that they want to study in.

Do they capture the needs of the broad market? • Most people don’t have a strong opinion. not wait for customer complaints • Customer complaints can be an opportunity to gain/regain a customer depending on how we handle the complaint – example of on-line retailer and TV purchase • Another (bad) example of on-line retailer for purchase of books Voice of the Customer – What the customer needs and does not need – What are the problems that a customer faces in using the product or service – How does our product or service compare to the competition – Why do non-customers not buy from us – Why did past customers stop buying from us • If a company does not have an ear for the voice of the customer it will not last long • The voice of the customer is the company’s only method of finding out Voice of the Customer – The Voice of the Customer • Begin Module 5 Session 4 41 40 42 • People notoriously hate to fill out surveys and questionnaires • Surveys have a very low return rate. often below 10 percent. Internet news groups. Henry Ford used to say that 95% of the people do not have an opinion. This can also be done by senior managers without disclosing who they are – The same may be repeated at a competitor and experiences compared • Mystery shoppers Other Methods • Comment cards enclosed with warranty card when product is purchased.38 37 39 • Companies need to actively seek customer opinion and feedback. Customer feedback methods . How can I base my product on the opinion of 5% of the people? Problems With Feedback – Hire professionals to go an shop for the product or service provided. discussion forums • Employee feedback • Mass customization. • Customer survey and questionnaire • Customer visits • Customer focus groups • Quarterly reports • Toll-free phones • e-mail. or do not have an opinion.

the customer carries a negative opinion of the entire experience • That is why you need the total involvement of everyone 45 47 46 Summary of Lecture 4 – Summary • Begin Module 6 Session 4 • End of module 5 Session 4 The Total Experience 44 • You need to observe people doing what they do • Which of what they are currently doing. from looking/shopping through purchase. • People change their minds Problems With Feedback . he would have asked for a horse that worked twice as hard and ate half as much – you would never have invented the tractor. is not facilitated by what is available in the market • Design the product or service to meet the requirement • Test it in the field and iterate the design until it is perfect (or close) Design Thinking • Customers do not know what is possible. and service. • If the provider of the product or service falters at any stage.43 • Customers are the reason for a company to exist • Companies need to clearly understand what the customers need and ensure that they get what they want and do not get what they do not want • Customers can be both internal as well as external. Example: If you had asked a farmer what he wanted. Both need to be satisfied. • Sometimes it is not easy to define who is the customer – it is not always the person who pays for the product or service 48 • Understand that purchasing a product or service is a total experience. or wanting to do.

Summary of Lecture 4 .• End of module 6 Session 4 50 49 • Seeking customer feedback is both important as well as challenging • People do not like to fill out surveys and feedback forms and do not know what may be technologically possible • Design thinking is a method for observing people using the product in practice and understanding gaps in the product.