1. QFD, Management of Technological Innovation, KV Patri Quality Function Deployment QFD Benchmarking

2. QFD, Management of Technological Innovation, KV Patri

4. Examples of Failed Product Innovations Frequently occurring external causes [Eversheim 97] Insufficient market preparation (e.g. dishwasher of 90 cm height) Customer requirements not met (e.g. German eco-car) Not technically perfected (e.g. first CVTs) Too late on the market (e.g. video 2000)

5. QFD, Management of Technological Innovation, KV Patri Examples of Failed Product Innovations Frequently occurring internal causes [Eversheim 97] Plenty of ideas but too little acceptance Lack of promoter Communication disfunctional Processing of subjects is unsystematic

6. QFD, Management of Technological Innovation, KV Patri A successful Innovation: Shower Head with Anti-lime System (Friedrich Grohe AG, Germany) [Eversheim 97]

7. QFD, Management of Technological Innovation, KV Patri

8. Benchmarking The next six slides consist of notes from Tony Bendell, Louis Boutler, and Paul Goodstadt, Benchmarking for Competitive Advantage, Pitman Publishing, London, 1998 (HD62.15.B46)

9. QFD, Management of Technological Innovation, KV Patri 1950s: The Japanese visited many thousands of American and European firms to absorb ideas regarding technology and business practices. Between 1952 and 1984, there were more than 42,000 contractual imports of knowledge. By 1960s, the Japanese were catching up. In 1979, Xerox in the USA and Rank Xerox in Europe found themselves depressingly behind Fuji Xerox in Japan. They benchmarked their practices with those of Fuji Xerox and regained leadership. Today, Xerox is believed to be the major expert in benchmarking.

10. QFD, Management of Technological Innovation, KV Patri As the world becomes smaller, front-edge companies are realizing that they must match or exceed the best practices from competitors anywhere in the world in order to survive. If we set our improvement targets without reference to those outside, our targets may not be taxing enough and we will fall behind. During BM, it is not enough to compare output measures. We also need to understand ‘why’ through personal discovery. Public sector benchmarking is a new and underutilized concept.

11. QFD, Management of Technological Innovation, KV Patri Standard Process Classification System of the US-based International Benchmarking Clearinghouse 1. Understand markets and customers 2. Develop vision and strategy 3. Design products and services 4. Produce and deliver 5. Develop and manage human resources 6. Manage information 7. Market and sell 8. Invoice and service customers 9. Execute environmental management program 10. Manage financial and physical resources 11. Manage external relationships 12. Manage improvement and change

12. QFD, Management of Technological Innovation, KV Patri The Xerox Benchmarking Process 1. Identify benchmarking subject 2. Identify comparative companies 3. Determine data collection method and collect data 4. Determine current competitive gap 5. Project future performance 6. Communicate findings and gain acceptance 7. Establish functional goals 8. Develop action plans 9. Implement and monitor progress 10. Recalibrate benchmark

13. QFD, Management of Technological Innovation, KV Patri Critical Success Factors used by Xerox while Conducting BM Customer satisfaction Employee satisfaction Return on assets Market share

14. QFD, Management of Technological Innovation, KV Patri In the BM Exercises Conducted by Xerox Areas that have been benchmarked Bechmarking partners Manufacturing operations ---------- Manufacturing safety ---------------- Factory floor layout Research and product development Distribution --------------------------- Billing and Collection --------------- Quality Management ---------------- Quality improvement ---------------- Supplier development --------------- Saturn (a division of GM) Fuji-Xerox DuPont Cummins Engine Hewlett-Packard L.L. Bean Inc. American Express Toyota Florida Power and Light Honda Manufacturing of America

15. QFD, Management of Technological Innovation, KV Patri Quality Function Deployment Building the House of Quality [Jackson 88] Developed in Japan in the 1970s. First applied at the Kobe Shipyard of Mitsubishi Heavy Industries Ltd. In the early 1980s, Dr. Don Clausing introduced QFD to Xerox. The American Supplier Institute and GOAL/QPC led the movement in the US.

16. QFD, Management of Technological Innovation, KV Patri QFD is a structured method that uses the 7 M&P tools to identify and prioritize customer requirements, translates customer requirements into engineering requirements systematically deploys the engineering requirements throughout the company at each stage of product development and improvement.

17. QFD, Management of Technological Innovation, KV Patri Establishing Customer Requirements: Needs, Wants and Exciters Yesterday’s exciters are today’s wants. Today’s wants are tomorrow’s needs. Stratify customers into groups using a tree diagram, affinity diagram, Pareto diagram, or other method. Establish requirements each customer group through customer surveys, market research, analysis of service data, reviewing contractual requirements, or reviewing regulatory requirements.

18. QFD, Management of Technological Innovation, KV Patri The 7 Manufacturing & Planning tools are Affinity Diagram Interrelationship Graph Tree Diagram Matrix Diagram Process Diagram Program Chart Arrow Diagram Matrix Data Analysis

19. QFD, Management of Technological Innovation, KV Patri WHAT HOW What-How Matrix Relationship [Jackson 96]

20. QFD, Management of Technological Innovation, KV Patri Goal (What) Objective (How) Level 1 Matrix Deployment Sell Product Make Profit [Jackson 96]

21. QFD, Management of Technological Innovation, KV Patri Goal (What) Objective (How) Level 2 Matrix Deployment (and so on) Sell Product Advertise Receive Orders Manufacture Products Ship Goods [Jackson 96]

22. QFD, Management of Technological Innovation, KV Patri Customer Requirements Design Requirements Design Requirements Engineering Design Engineering design Product Characteristics Deployment of Customer Requirements to Product Characteristics [Jackson 96]

23. QFD, Management of Technological Innovation, KV Patri Engineering Design Product Characteristics Product Characteristics Manufacturing/ Purchasing Operations Manufacturing/ Purchasing Operations Production/ Quality Controls Deployment of Product Characteristics to Production/Quality Controls [Jackson 96]

24. QFD, Management of Technological Innovation, KV Patri Building the House of Quality 1. Establishing Customer Requirements 2. Determining Design Requirements 3. Developing the Relationship Matrix 4. Developing the Interaction Matrix 5. Establishing Priorities for the Design Requirements 6. Completing the House of Quality

25. QFD, Management of Technological Innovation, KV Patri Step 1 Establishing Customer Requirements Design Requirements Consumer Priority Customer Requirements Cr-1 High Degree of Compatibility CR-2 Ease of Operation CR-3 Capable of Close Tolerance Cr-4 Minimal Operating Time Cr-5 Highly Reliable Strong Medium Weak [Jackson 96]

26. QFD, Management of Technological Innovation, KV Patri Step 2: Determining Design Requirements Design Requirements Consumer Priority Customer Requirements Cr-1 High Degree of Compatibility CR-2 Ease of Operation CR-3 Capable of Close Tolerance Cr-4 Minimal Operating Time Cr-5 Highly Reliable Strong Medium Weak Mean Time Between Failures = 5000 hrs Accuracy = 0.0001 in Built-in Self-Test Self-Calibration Computer Controlled Mean Time to Repair = 0.5 hrs Module-level Replacement [Jackson 96]

27. QFD, Management of Technological Innovation, KV Patri Step 3: Developing the Relationship Matrix Design Requirements Consumer Priority Customer Requirements Cr-1 High Degree of Compatibility CR-2 Ease of Operation CR-3 Capable of Close Tolerance Cr-4 Minimal Operating Time Cr-5 Highly Reliable Strong Medium Weak Mean Time Between Failures = 5000 hrs Accuracy = 0.0001 in Built-in Self-Test Self-Calibration Computer Controlled Mean Time to Repair = 0.5 hrs Module-level Replacement [Jackson 96]

28. QFD, Management of Technological Innovation, KV Patri Consumer Priority Customer Requirements Cr-1 High Degree of Compatibility CR-2 Ease of Operation CR-3 Capable of Close Tolerance Cr-4 Minimal Operating Time Cr-5 Highly Reliable Strong Medium Weak Mean Time Between Failures = 5000 hrs Accuracy = 0.0001 in Built-in Self-Test Self-Calibration Computer Controlled Mean Time to Repair = 0.5 hrs Module-level Replacement Step4 Developing the Interaction Matrix [Jackson 96]

29. QFD, Management of Technological Innovation, KV Patri Consumer Priority Customer Requirements Cr-1 High Degree of Compatibility CR-2 Ease of Operation CR-3 Capable of Close Tolerance Cr-4 Minimal Operating Time Cr-5 Highly Reliable Strong = 9 Medium =3 Weak = 1 Mean Time Between Failures = 5000 hrs Accuracy = 0.0001 in Built-in Self-Test Self-Calibration Computer Controlled Mean Time to Repair = 0.5 hrs Module-level Replacement 123 1 45 Benchmarking Score based on the degree to which customer requirements are met Technical Benchmarking Our Company: O Competitor A Competitor B Competitor C 5 BOCABOCA 4 3 2 1 OBACOBAC BAOCBAOC CBAOCBAO OABCOABC CBAOCBAO OBACOBAC Key Elements Risk Weights Absolute Relative 108 12 9 15 14 2 8 3 27 15 14 6 24 3 X X X A B C O O C B A B C O A A B C O A B O C