1. LeanSigma ® Facilitator Training Module 4 – Voice of the Customer

2. Topics Page Lean Sigma Process.......................... 3 Customer Needs, VOC......................... 4 Critical to Quality (CTQ)....................... 14 Kano Models............................... 18 Value-Added Activities........................ 21

3. Lean Sigma has six steps to optimize processes. 3

4. LeanSigma starts with the Customer Customer focus begins by linking business strategy and customer wants & needs There are two major types of customers, with differing needs −Internal customers (partners) −External customers Customers wants and needs can be determined in many ways −Surveys −Interviews −Focus groups, etc 2

5. Customer needs aren’t always clear. 5 Marketing Defined ItSales Ordered It Management Ordered It Engineering Designed It Manufacturing Produced ItCustomer Service Installed ItTechnical Support Repaired ItWhat the Customer Wanted Ameriquest dinner video

6. The Customer’s views are called the “Voice of the Customer”. 4 Organizational Objectives & Goals Client Expectations Voice of Business (VOB) Voice of Customer (VOC) Improvement Projects Voice of Process (VOP)

7. Reactive and Proactive Data give insights into the VOC. 7 Reactive data comes to you Proactive data is gathered by reaching out to the customer

8. Reactive Data is valuable but doesn’t tell the whole story. Reactive data reflects past performance – often related to customer dissatisfaction – and can be reflected through: Customer complaints Help Desk calls or emails Sales data Credits due to contested payments Warranty claims Product returns 8

9. Proactive Data is a richer source of information. Proactive data requires more effort to collect, but can provide more current and specific information. Examples: Interviews Focus groups Surveys Comment cards Sales calls Customer visits Market research Competitive analysis 9

10. “Voice of the Customer” Sample Survey Results 10

11. Surveys and Sampling Surveys are used to find out more about customers: −Opinions −Attitudes −Preferences Sampling is a method of gathering information about populations from a cross section of individuals 11 What are some ways to survey and the potential pitfalls of each?

12. VOC sets the expectations our processes must meet. “Voice of the Process” describes how the process performs over time. The results of a process can be shown in a curve. Process Capability compares the Voice of the Customer (VOC) to the Voice of the Process (VOP) assessing a process to see if it meets customer requirements −VOC = specifications given by the Customer for the product −VOP = the distribution of the data obtained from the process 12 Voice of the Customer Voice of the Process Lower Spec Limit Upper Spec Limit X

13. Customers Experience Variation Not Averages! 13 Pilot APilot B End of runway! Avg. distance to stop Which pilot would you want to fly with?

14. Understanding Customer views is the starting point of Lean work. Customer information is translated to the business as customer requirements, or critical to quality (CTQ) requirements Excelling at fulfilling customer CTQs can drive differentiation Differentiation can give a competitive advantage in products and services 14

15. Critical to Quality characteristics (CTQs) are outcomes that measure the success of a process or service. 15 Reactive and proactive client input can often seem situational or too general. Inputs sometimes seem in conflict. We need to categorize the inputs and make them more specific in order to take action. CTQ trees help us to make general input more specific.

16. CTQ Trees derive critical to quality characteristics. What does a Tree diagram do? Converts general customer goal statements into more detailed Critical To Quality Characteristics (CTQs) −From general “WHAT” to specific “HOW” Takes input from all the sources identified in previous VOC activities like surveys, complaints, etc. Iterates until you identify meaningful, measurable and actionable characteristics 16

17. CTQ Trees – Example 17 Good Service Files sent to 3 rd parties on time System Avail. Good Support Fast response times Minimal downtime Calls answered promptly Flexible response to overtime requests Trouble tickets actioned quickly Severity Level 1 tickets < 4 hrs Password resets < 2 hrs Max response time < 0.2 secs System available Mon-Sat 07:00

18. Kano models help us differentiate client wants. 18 Helps to prioritize when designing new products / processes or improving an existing one Service Element Customer SatisfactionHigh Low Absent Fully Implemented Excitement Threshold Performance Must Haves Satisfiers Delighters

19. Kano describes three kinds of client needs. 19 Must haves – When these elements are not present, the client is dissatisfied. They are a basic need. (e.g. wheels, steering wheel) Satisfiers – As you add more of these elements, the client becomes increasingly satisfied. (Excellent sound system, good fuel economy, good crash test results, GPS) Delighters - The client may buy the product without these elements, but adding it would generate excitement or convince them to switch brands. (Self-parking, Self- steering, Course adjustment when other cars too close)

20. Kano Exercise In teams, generate a list of customer requirements for buying a television. Categorize each of the requirements as a: −Must have – Basic Requirement −Satisfier – More Is Better −Delighter – Unexpected benefit Determine priorities for buying your television 20 LOW Customer Satisfaction Not Present Or Done Poorly HIGH Customer Satisfaction Present DELIGHTERS Breakthrough Customer Needs/Features SATISFIERS Core Competitive Requirements Must Haves Basic Requirements X

21. Customer needs and wants determine the Value of activities. 21 The key is to maximize value from the customer’s perspective and minimize waste.

22. The value of activities is segmented into three categories. Value-added (VA) Business Non- value added (BNVA) Non-value added (NVA) 22

23. Value-added activities meet three strict criteria. 1.The client would pay for it – if they saw it 2.Must transform information or material into a service or product 3.Must be done right the first time 23 Value-added (VA) Business Non- value added (BNVA) Non-value added (NVA)

24. Understanding the value or non- value of each activity determines our strategy. Audits, time-tracking, status meetings, etc. Rework, Duplicate efforts, Waiting, etc. Insights, accurate & timely reporting 24 Minimize time spent Eliminate Business non- value add Value Type ExamplesStrategy Non-value add Value added Maximize Value-added (VA) Business Non- value added (BNVA) Non-value added (NVA)