r1 - customer focus

8/8/2019 R1 - Customer Focus

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Six Sigma

Customer Focus

Customer Focus

Focusing on the customer is essential to the success of any business. We all recognize this idea.But do we really internalize this idea? Do we really believe that such a focus has the potential todrive business growth and improve the quality of our day-to-day work as well as improve thechance that our business, and hence our jobs, will flourish?

Business growth depends on how well we meet customer expectations in terms of quality, price,and delivery. In turn, our ability to satisfy these needs with certainty is controlled by processcapability and the amount of variation in our processes (and these processes could be any kind ofprocess, ranging from administrative to manufacturing). Variation has a direct impact on ourbusiness results in terms of cost, cycle time, and the amount of defects that affect customersatisfaction.

It is vital that every employee in the company understand the values and philosophy of Six

Sigma. Six Sigma encompasses several things -- it is a metric, it is a problem solvingmethodology and set of tools -- but most important it is a total business philosophy that ourcompany has embraced in order to achieve the growth aspirations of our businesses. It isimportant that we reflect on how the values and philosophy of Six Sigma is different from thebeliefs, values, and priorities we currently emphasize in our organizations. This is vital becausethose things that are truly valued in an organization, those things that get the attention, are thethings that drive everyone's behavior.

A key activity in Six Sigma is understanding (in quantifiable terms) customer needs andtranslating these needs into the measurable outcomes of our processes (what we call a "need-do" pair). In turn, we need to focus on understanding and measuring the inputs to the processand looking at the root causes of variation in our processes.

In summary, if we value customer satisfaction as a prerequisite of business survival and growth,and if we accept that to a customer uncertainty and variation from what they expect is a qualityproblem, then we must focus on the root issues that make our internal processes inconsistentand variable. The only way to ensure that this focus happens is to make sure we place a valueand emphasis on it and this takes measurements, since, as the old cliche goes, "what getsmeasured, gets done". If we don't measure, or don't know how to measure inconsistency,variation, defects, etc. then how will we achieve customer satisfaction?


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4stomer Focus

Recognize

Description of what is valuedP

Priority

Describe and

rank what you

think is really

valued at

Your company

xploring Our Values

Key Questions

What is Six Sigma and how does it relate to our business?

How does Six Sigma help us focus on customer satisfaction and competitivecapability?

How does Six Sigma improve product, technology, and organizational capability?

What type of results can be expected through the adoption of Six Sigma?

What are the global success criteria for implementing and deploying Six Sigma?

What are the initial steps for setting Six Sigma in motion?

4Customer Focus

Rec

ognize

Description of what is valuedP

Priority

Describe and

rank what you

think is really

valued at

Your company

Exploring Our Values


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Exploring Our Values

On a piece of paper, quickly write down the things that you perceive are most valued,emphasized, and get the most management attention -- the things you think our company standsfor. Next, quickly rank them in terms of what you perceive are the priorities of the organization.We will use these as input to a group discussion.

5Customer Focus

Recognize

What Six Sigma ValuesWhat We Really Value

1_

01_

01_0

04

Comparing Value Systems

Improving business

performance by improving

Quality and consistently

meeting CustomerExpectations

Measurement

Measuring inputs, not just

outputs

Reducing defects, by

improving process and

product, to help achieve

business objectives

Comparing Value Systems

As we go forward in this course we will discuss further the philosophy of Six Sigma, but it isimportant to highlight a few important values of Six Sigma and to compare and contrast thesewith what we as a group feel is currently emphasized in our company.

Quality and consistently meeting customer expectations. Although it may seem obvious, it isimportant to emphasize and re-emphasize that Six Sigma's main focus is to improve quality --

our ability to consistently meet customer expectations. In improving our quality, we will alsoimprove other elements of performance such as cost and delivery.

Measurement. Six Sigma values measurement and the quantification of quality and ourprocesses with data. In short, if you can't measure something with data, you really don't knowanything about it and you have little chance of improving it.

Measuring inputs. Again, it may seem obvious that we should focus on measuring the inputsof a process, but often don't emphasize these measures or even measure them at all.Instead, we often spend more energy measuring the outputs which does not help us inunderstanding the root issues of problems in quality.


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6stomer Focus

Recognize

Behavior is a function of Values

Cutting to the Core

Behavior Values

havior and Values

Reducing defects by improving processes and product design. The identification andreduction of defects is the main engine of quality improvement. The focus of our effortsshould be to improve the processes that produce products and services as well as improvingthe design of our products and services so they can be made and delivered moreconsistently.

An overall message of Six Sigma is that what we value -- what we measure, follow up, andemphasize -- is a vital determinant of how successful a company will be in improving itsperformance.

Behavior and Values

Cutting to the core: What we value drives our day-to-day behavior.

A stating point for any organization on the path to Six Sigma is to reflect on whether it is trulyfocused on quality and the customer.

6Customer Focus

Recognize

Behavior is a function of Values

Cutting to the Core

Behavior Values

Behavior and Values


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7Customer Focus

Reco

nize

stablishing Customer Focus

QualityPerformance to the standard expected by the

customer.

Definition of Quality (ISO 8402)

Totality of characteristics of an entity that bear on its

ability to satisfy stated and implied needs.Entity (or Item): That which can be individually described and

considered: process, product, and organization, a system or a

person or any combination thereof.

CustomerAnyone internal of external to the organization who

comes in contact with the product or output of my

work.

Anyone whose success or satisfaction depends on my

actions.

Source: Total Quality Leadership: A path to Excellence. Allied Signal Inc., Morristown N.J.

Establishing Customer Focus

What is customer satisfaction?

customer, n [O Fr. coustumier, L.L. custumarius, custom.]1. A person who buys, especially one who buys regularly.2. A person with whom one has to deal.

satisfaction, n [O Fr., from L. satisfaction (-onis), from satisfactus,pp. ofsatisfacere, to satisfy.]

1. To gratify fully the wants or desires of; to supply to the full extent.2. To free from doubt, suspense, or uncertainty; to give full assurance to.3. To comply with (rules or standards).

Embedded within these definitions are two key ideas. First, the notion that the customer is a

person, not an organization, corporation, etc. Second, the idea that satisfaction is the extent ofcertainty a person (customer) has that the standard will be met.

Naturally, this would imply that as certainty increases the likelihood of satisfaction would likewiseincrease. Later we will explore in greater detail the concept of certainty and probability -- but it isvital to make special note of this idea.

7Customer Focus

Reco

nize

Establishing Customer Focus

QualityPerformance to the standard expected by the

customer.

Definition of Quality (ISO 8402)

Totality of characteristics of an entity that bear on its

ability to satisfy stated and implied needs.Entity (or Item): That which can be individually described and

considered: process, product, and organization, a system or a

person or any combination thereof.

CustomerAnyone internal of external to the organization who

comes in contact with the product or output of my

work.

Anyone whose success or satisfaction depends on my

actions.

Source: Total Quality Leadership: A path to Excellence. Allied Signal Inc., Morristown N.J.1_

01_

01_

006


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8Customer Focus

Rec

o

nize

What Makes a Good Coffee Service?

Supplier Perspective

(Hotel)

Good Hot Coffee

Fast Line, Especially forRefills

Close to High-CapacityRestrooms

Close to Telephones

Room to Chat

Customer Perspective

(Conference Attendees)

. . . So why do such differences

in perspective exist ?

rry Bebb & Associates - World Class by Design Conference

vember 1993 - Buffalo, New York

ritical to Satisfaction

Good Hot Coffee

Clean China

Clean Linen

Attractive Display

Extras - Snacks

Critical to Satisfaction

It is vital that we understand and are able to quantify what is critical to the customer's satisfaction.We must do this to ensure that we are working on the right things from the customer'sperspective.

We need to ask ourselves how easy it is for our customers to do business with us. We need toask whether we are making assumptions about what customers need. Lastly, we need to ask howoften we ask our customers (internal and external) what they need and whether this is properlycommunicated throughout our organization.

8Customer Focus

Reco

nize

What Makes a Good Coffee Service?

Supplier Perspective

(Hotel)

Good Hot Coffee

Fast Line, Especially forRefills

Close to High-CapacityRestrooms

Close to Telephones

Room to Chat

Customer Perspective

(Conference Attendees)

. . . So why do such differences

in perspective exist ?

Barry Bebb& Associates - World Class by Design Conference

November 1993 - Buffalo, New York1_

01_

01_

007

Critical to Satisfaction

Good Hot Coffee

Clean China

Clean Linen

Attractive Display

Extras - Snacks


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9Customer Focus

Reco

nize

ariation Is the Enemy

Uncertainty

Unknown

Disbelief

Risk

Defect Rate

Variation

Variation Is the Enemy

As you will recall, the following assertion was made:

"As certainty increases the likelihood of satisfaction would likewise increase."

Variation is the enemy of certainty and therefore, is also the enemy of customer satisfaction.Variation drives the unknown, it adds to customer (and employee) disbelief and lack ofconfidence in the ability of processes to deliver customer satisfaction. Variation increases risk --the risk that a result will not meet expectations. Lastly, variation is a driver of defects.

9Customer Focus

Reco

nize

Variation Is the Enemy

Uncertainty

Unknown

Disbelief

Risk

Defect Rate

Variation

1_

01_

01_

014


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10Customer Focus

Reco

nize

Certainty +

Known +

Belief +

Confidence +

Yield +

Uncertainty

Unknown

Disbelief

Risk

Defect Rate

= 100%

= 100%

= 100%

= 100%

= 100%

onsequences of Variation

Consequences of Variation

The greater the variation, the less certainty, belief, confidence, and yield. In short, the morevariation in our business processes (and hence in our business itself) then the less we know.

10Customer Focus

Certainty +

Known +

Belief +

Confidence +

Yield +

Uncertainty

Unknown

Disbelief

Risk

Defect Rate

= 100%

= 100%

= 100%

= 100%

= 100%

1_

01_

01_

015

Consequences of Variation


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11Customer Focus

Recognize

Measure of variationand quality Measure of capabilityof our processes

ow Do We Measure Variation and

Quality?

How Do We Measure Variation and Quality?

Unless we can measure something, we cannot improve our performance. "Sigma" is a unit of

measure that gives us a way of measuring variation and the capability of our processes to meetcustomer expectations consistently. We will discuss Sigma in more detail as the courseprogresses.

What is a Sigma? It is a Greek letter that represents a measure of variation. It could beinches, volts, pounds. How do you measure variation, such as product variation? This iswhere we can use Sigma. In the same way that we describe something as six inches long orweighing 3 pounds, when we say that something is 6 Sigma, we are saying that there is anextremely small amount of variation.

The term "Sigma" is used to designate the distribution or spread about the mean (average) ofany process or procedure in manufacturing, engineering, services, or transactions.

For a business, engineering or manufacturing process, the sigma value is a metric thatindicates how well that process is performing, the higher the Sigma value, the better. Sigma

measures the capability of the process to perform defect-free-work. A defect is anything thatresults in customer dissatisfaction.

To calculate Sigma, we will use a common measurement index: "Defects Per MillionOpportunities" (DPMO), where an opportunity can be virtually anything -- the dimensions of acomponent, a line of code, a blank line on an administrative form, etc.

The Sigma value indicates how often defects are likely to occur. The higher the Sigma value,the less likely a process will produce defects. As Sigma increases, costs go down, cycle timegoes down, and customer satisfaction goes up.

11Customer Focus

Reco

nize

Measure of variationand quality Measure of capabilityof our processes

How Do We Measure Variation and

Quality?

1_

01_

01_

016


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12Customer Focus

Reco

nize

Do we have a customer focus?

Do we have a quality focus?

Do we have an input focus?

What Do We Measure Now?

What numbers get the most attention in your area?

What quality measurements do we have?

How do we use these measures?


12Customer Focus

Reco

nize

Do we have a customer focus?

Do we have a quality focus?

Do we have an input focus?

1_

01_

01_

017


What numbers get the most attention in your area?

What quality measurements do we have?

How do we use these measures?


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13Customer Focus

Rec

o

nize

Maximizing the Customer Supplier

Relationship

Deriving value from the Need - Do interaction

Need Do

Customers and Suppliers Exchange Value

Through Need-Do Interaction

Customer Supplier

Maximizing the Customer Supplier Relationship

The customer/supplier relationship is focused on a need-do pair relationship. Maximum value,both to the customer and to the supplier, is achieved when needs and dos have maximumoverlap.

If we do things that customers don't need, then we are not adding value; an organization existsonly to supply value to customers.

13Customer Focus

Reco

nize

Maximizing the Customer Supplier

Relationship

Deriving value from the Need - Do interaction

Need Do

Customers and Suppliers Exchange Value

Through Need-Do Interaction

Customer Supplier

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01_

01_

008


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14Customer Focus

Reco

nize

Delivery

Price

Quality

Need

Do

Cycle Time

Cost

Defects

Maximizing the Interaction

Supplier strives for performance on Cycle Time, Cost and Defects to meet

Customers increasing expectations on Delivery, Price and Quality.


Specifically, value is generated for the customer via quality, price, and delivery. But in meetingthese customer needs, there is also a benefit for the supplier in terms of fewer defects, lowercosts, and reduced cycle time. We emphasize once again that the reduction of defects is a majordriver of cycle time reduction (that is, reducing all the time we take to fix problems) as well as amajor driver of reducing total cost (by reducing all the resources tied up in inspecting andreworking defects).

14Customer Focus

Reco

nize

Delivery

Price

Quality

Need

Do

Cycle Time

Cost

Defects

1_

01_

01_

009


Supplier strives for performance on Cycle Time, Cost and Defects to meetCustomers increasing expectations on Delivery, Price and Quality.


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15Customer Focus

Reco

nize

inking Customer Needs

nd What We Do

Need Do

Critical to Satisfaction Critical to Quality

Customer Supplier

How the customer

measures qualityThe result our

processes must

consistently produce

CTQCTS

Linking Customer Needs and What We Do

The idea of the "need-do" interaction runs throughout Six Sigma. Later, we will discuss suchterms and concepts as "Critical to Satisfaction" or CTSs and "Critical to Quality" or CTQs. Themain message is that all of this leads back to the idea that we must understand the customersneeds and translate this into what we must do internally.

Of extreme importance is the idea that unless we satisfy customer needs through processes thatare consistent, we may satisfy the customer on quality, but disappoint the customer in anothervital area, namely price, since, as we shall see, achieving quality with inconsistent processes isvery costly.

15Customer Focus

Reco

nize

Linking Customer Needs

and What We Do

Need Do

Critical to Satisfaction Critical to Quality

Customer Supplier

How the customer

measures qualityThe result our

processes must

consistently produce

CTQCTS

1_

01_

01_

010


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16Customer Focus

Reco

nize

he Overall Perspective...

Customer

Requirements

ProcessCapabilities

Material

Capabilities

RobustDesigns

PredictableFactory

Consistent

Performance

Superior

Reliability

High Quality

On-Time

Delivery

Lower Costs

CustomerSatisfaction

BusinessResults

Customer Satisfaction is a Business Issue

The Overall Perspective

The overall perspective is that customer satisfaction is a business issue.

By focusing on well-defined customer requirements and by utilizing known processes andmaterial capabilities, we can create designs that are insensitive (robust) to variations.

Robust designs remove uncertainty and lead to predictable performance with all the resultantbusiness benefits.

The end result and driving force of all our efforts in Six Sigma will be to improve customersatisfaction and therefore business results.

16Customer Focus

Reco

nize

The Overall Perspective...

Customer

Requirements

Process

Capabilities

MaterialCapabilities

Robust

Designs

Predictable

FactoryConsistent

Performance

Superior

Reliability

High Quality

On-Time

Delivery

Lower Costs

Customer

Satisfaction

Business

Results

Customer Satisfaction is a Business Issue1_

01_

01_

011


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17Customer Focus

Reco

nize

If we are so good at X, why do we constantly test and inspect Y?

s X1 . . . XN

s Independent

s Input-Process

s Cause

s Problem

s Control

f (X)Y=

he Focus of Six Sigma

Y

Dependent

Output

Effect

Symptom

Monitor

The Focus of Six Sigma

If consistency of our internal processes is a key to satisfying customers, then it raises thequestion: what should we measure?

Six Sigma emphasizes the measurement of inputs. Let's emphasize this point. Sigma is not onlya way of measuring the output or result of a process (the "Y"), but also to measure theconsistency of the inputs (the "X's"). If we truly want to achieve consistency of what we "do," if wewant to satisfy customers, then we must measure and understand the X's.

The phrase Y equals a function of x comes up again and again in Six Sigma so it is important totake note of this concept.

Lessons Learned What we currently value in our organization as compared to the things a Six Sigma

organization values.

Behavior is a function of values.

The definition of "customer satisfaction" and how customer satisfaction is negatively affectedby variation and uncertainty.

The need to quantify customer needs as well as our performance in meeting these needs.

Variation is the enemy of customer satisfaction.

Sigma is a measure of process variation and quality.

17Customer Focus

Reco

nize

If we are so good at X, why do we constantly test and inspect Y?

s X1 . . . XN

s Independent

s Input-Process

s Cause

s Problem

s Control

f (X)Y=

1_

01_

01_

018

The Focus of Six Sigma

Y

Dependent

Output

Effect

Symptom

Monitor


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The importance of translating what is Critical to Satisfaction (the customer's need) to what isCritical to Quality (what we need to do).

Improving our ability to consistently meet customer needs leads to bottom-line businessresults.

In order to improve our internal processes, we need to focus on the inputs to processes, the"X's."

r1 - customer focus

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